Future silver contracts hoax

[Michal]

I know that You should never trust random comment in internet, but that makes me wondering do you really can pay future contract in cash (for price in this moment in past) instead of delivery even if customer requested delivery?

[Martlet]

If you want delivery, you either buy the futures contract on an exchange that delivers, or go into the physical market with the cash from your cash settled future.  Other metals, commodities, share indexes etc have futures with cash settlement.

[vand]

we discussed this recently in this thread. Yes there is a certain small amount of physical delivered each month, but holding a futures contract to expiration is no guarantee you'll be able to receive delivery because Comex absolutely reserve to right to settle all contracts in cash. I think it's fairly obvious why this is the case.

Incidentally it was also talked about on the kitco forums recently:

https://gold-forum.kitco.com/showthread.php?150832-Happy-silver-is-dragging-its-feet

 

 

[HawkHybrid]

read the contract, there's no conspiracy about it.

the comex reserve the right to settle in which

ever form they choose.

also people can simply take the cash and buy

physical silver with it on receiving the funds.

this may incur a small shuffle premium. if silver

was soo manipulated and set to shoot to the

moon then this small premium would not matter

in the bigger picture.

the comex is not designed to trade in physical

metal. those who insist that it must all have an

agenda.

if the shanghai exchange settles in physical

metal then go and buy off them.

there is no shortage in silver, there have never

been a shortage in silver and it's the silver demand

and not supply that affects the prices.

 

it's like hammering with an axe, and then saying

there is a conspiracy because it's such a poor

tool. if you read the paper work and use goods and

services as they should be used...

if you sell silver then you are rigging the markets

but if you buy silver then that's ok. this is a load of

biased rubbish, by people who obviously have an

agenda.

 

there's has yet been one bit of evidence that is

conclusive of market rigging.

 

HH

[sixgun]

What i think was an disinfo merchant appeared on the 'Silver whale' thread where silver futures were discussed. He appeared with a US address, posted something about  being in Sweden for a while and then focused on the Silver whale thread. He has not posted since. He made out you would be able to take delivery of silver whatever. i suggested 10 000 contracts which is 50 000 000 ounces. He made out they would be delivered and when i maintain you would not get delivery of 50 million ounces he posted 'face palm'.

i believe this poster was a disinfo agent - as we saw a disinfo agent on the global warming thread the other day. [ps the heat wave is due to the unstable jet stream due to the weakening magnetosphere which normally keeps the jet streams in a settled position - at the moment it has gone much further north allowing hot air from over North Africa into Europe - nothing to do with global warming - it is snowing in parts of Canada at the moment]. 

The issue is not the small print - the cash settlement - it is that this small print is the standard. It is that unless you are JP Morgan or such, you will struggle to get physical off the COMEX. It is not a futures market anymore. It is simply betting on a number called the silver price. It is not really the price of physical silver b/c the silver isn't there to deliver. It is a market designed to manage price following the end of the Bretton Woods agreement and the London Gold Pool.

[goldmember44]

If one wants to have physical silver or gold, you don't go and play with futures contracts... you go to a bullion dealer lol.

[sixgun]

Just now, goldmember44 said:

If one wants to have physical silver or gold, you don't go and play with futures contracts... you go to a bullion dealer lol.

or you buy off fellow members of the Silver Forum - i buy most of what i have off the forum and am happy to do so.

[HawkHybrid]

2 hours ago, sixgun said:

The issue is not the small print - the cash settlement - it is that this small print is the standard. It is that unless you are JP Morgan or such, you will struggle to get physical off the COMEX. It is not a futures market anymore. It is simply betting on a number called the silver price. It is not really the price of physical silver b/c the silver isn't there to deliver. It is a market designed to manage price following the end of the Bretton Woods agreement and the London Gold Pool.

 

it is a futures market, the world has moved on.

this is like arguing that a car is no longer a car

because of all the electrical equipment we have

in cars nowadays.

it's a futures market because it helps in the price

discovery process. whether or not it actually

moves physical metal around is irrelevant.

what's important is the value of the goods and

services being bought and sold is being delivered.

(delivered meaning turning up in your bank

account as opposed to turning up at your front

door)

 

quit thinking stone age markets with horses and

carts. markets are all electronic now.

 

HH

[sixgun]

48 minutes ago, HawkHybrid said:

it is a futures market, the world has moved on.

this is like arguing that a car is no longer a car because of all the electrical equipment we have in cars nowadays.

it's a futures market because it helps in the price discovery process. whether or not it actually moves physical metal around is irrelevant.

what's important is the value of the goods and services being bought and sold is being delivered.

(delivered meaning turning up in your bank account as opposed to turning up at your front door) 

quit thinking stone age markets with horses and carts. markets are all electronic now.

HH

You have missed the point. The futures market claims to be forming legal contracts for the purchase and sale of actual units of 5000 oz silver. If there isn't delivery - if there is refusal to deliver and settlement in cash, it ceases to be a market for the price discovery of actual silver b/c there is no silver. 

It becomes a casino for speculators, a place where those with the deepest pockets and the regulators in their pockets can send price up and down like a yoyo with no silver and no intention or risk of delivery. This is how price can be manipulated. You will never to called to deliver. You are dealing in an imaginary commodity. It is like a saleroom putting up prices of new cars at £10 - you go to buy a car you get a piece of paper saying the car will be delivered for £10. But you won't have one delivered. All you can do is cash the paper in. What has this got to do with the price of cars? The real value of the car is £10 000 but this is irrelevant b/c you will never get your car delivered. so you never actually bought a car. This would not be price discovery of cars, it is just a mechanism to control a number, a fictional price and designed to perpetuate an illusion of fiat having value.

[Zhorro]

1 hour ago, HawkHybrid said:

 

it is a futures market, the world has moved on.

this is like arguing that a car is no longer a car

because of all the electrical equipment we have

in cars nowadays.

it's a futures market because it helps in the price

discovery process. whether or not it actually

moves physical metal around is irrelevant.

what's important is the value of the goods and

services being bought and sold is being delivered.

(delivered meaning turning up in your bank

account as opposed to turning up at your front

door)

 

quit thinking stone age markets with horses and

carts. markets are all electronic now.

 

HH

If these digital markets are simply selling phantom goods, I think we will all soon be back in the stone age following an almighty financial crash!

I find it difficult to see how phantom paper silver helps "the price discovery process".

Would it not be better to call them "Not-silver contracts"?

[HawkHybrid]

4 hours ago, sixgun said:

You have missed the point. The futures market claims to be forming legal contracts for the purchase and sale of actual units of 5000 oz silver. If there isn't delivery - if there is refusal to deliver and settlement in cash, it ceases to be a market for the price discovery of actual silver b/c there is no silver. 

 

you're missing the point. it's like saying that

£1 represents one pound in physical silver?

it did a very long time ago. the trading using

£'s still goes on due to the more updated

currency version of the exchange of goods and

services for payment(£).

it's not written in stone. a market is about

exchange of one set of values for payment in

another. it doesn't need to involve the movement

and payment in physical goods.

in the practical world we are not talking about

textbook definitions, it's all about what works

best.

5000 oz silver units is just a value similar to how

£1 is another unit of value. if you actually wanted

your 5000 oz physical silver you accept currency

payment of your 5000 oz contract and use those

funds to pay a physical bullion dealer. it's not

difficult.

example:

you turn up to a casino, you change some currency

for casino chips. you make a bet and win. then you

demand to be paid in currency at the tables. the

casino personnel tells you to accept the casino chips

and change it for currency when you're ready to leave.

it's not difficult to understand. the do not give out

currency winnings at the tables.

 

the comex legal contract is a contract for value. it

is not a binding contract for physical delivery of the

metal. it's 5000 oz's worth of silver that you are due.

it's not 5000 oz's of actually physical silver. that's

why the comex will deliver in which ever form it

finds most appropriate/convenient.

 

remember lots of futures contracts are for goods

that have yet to exist. eg unmined silver, yet to grow

wheat. what you are demanding from the exchange

is absurd in times of natural disasters(wheat failure).

who's going to over produce and cripple their profits

just so that you can take physical delivery?

 

HH

[HawkHybrid]

3 hours ago, Zhorro said:

If these digital markets are simply selling phantom goods,

 

they are trading the value of one set of goods

against another.

when was the last time you went online and

there was no delivery of physical silver in any

form what so ever?

if you want physical delivery of silver then use

your currency to exchange for physical silver.

the price discovery process has gone global via

the internet(inter-networking of large groups of

people). it's not about the slow process of

carting your wares to the market anymore.

 

HH

[sixgun]

 

Quote

 

What Is a Futures Market?

A futures market is an auction market in which participants buy and sell commodity and futures contracts for delivery on a specified future date. 

 

 

https://www.investopedia.com/terms/f/futuresmarket.asp

i can see you accept there is no delivery (other than for the favoured few) - which we both agree on. You basically accept it is a casino only dealing in currency - buying and selling contracts in fictional silver. That is fine - let's just accept it is no longer a futures exchange in precious metals, it is simply an arena for speculators, the cabal manipulators and their agents.

 

[HawkHybrid]

it's a futures market because it serves as a

futures market for those that use it as a

futures market(eg miners hedging part of

their incoming production).

you can't call it a fake because your

understanding of what a futures market

'should' look like is outdated.

it is still used in the price discovery process,

as it was previously. (this is the key part, all

those who have to gain are sticking steadfast

to the comex manipulating the prices.

otherwise it will unveil them as the cheats

that they are)

I buy things in the future market in indices.

the contract always delivers on the set

expiration date. but no one gets things sent

to their doorstep.

 

the delivery is for the value of the goods,

not the goods themselves. this allows for it to

reach traders globally. only the stupid don't

read the contracts before signing them.

 

HH

[Xander]

These cowboys should be banned from high-jacking the futures market by pretending its the "new digital age" get with it you dinosaurs, aye right, heard it.

The futures market is, if you purchase for example 500 ton of beans or whatever from next years harvest in another country, that is what you receive, hence "futures"  you don't receive the value of the beans at what someone else decides what that is. 

People should think for themselves and stop being deceived by the get with it man brigade. 

[HawkHybrid]

14 minutes ago, Xander said:

These cowboys should be banned from high-jacking the futures market by pretending its the "new digital age" get with it you dinosaurs, aye right, heard it.

The futures market is, if you purchase for example 500 ton of beans or whatever from next years harvest in another country, that is what you receive, hence "futures"  you don't receive the value of the beans at what someone else decides what that is. 

People should think for themselves and stop being deceived by the get with it man brigade. 

 

you can take delivery of your 500 ton of beans

whenever you want with the funds from the

contract. no one is being robbed of 500 ton

of beans.

we are not talking about r5 coins here. every

bean is similar to every other bean and the

bean delivery service can do that for you locally.

the problem with the comex being responsible

for physical delivery is it gets complicated when

dealing with contract owners half way around

the world. it's a practical logistics solution to

settle in currency and get contract owners to

sort out their own delivery of the physical goods.

 

kfc does it all the time. the original recipe is

american but the food is prepared locally. it's

like you're demanding kfc to prepare the food

in america and then ship it on demand, which is

completely unrealistic.

 

HH

[sovereignsteve]

6 hours ago, sixgun said:

You have missed the point. The futures market claims to be forming legal contracts for the purchase and sale of actual units of 5000 oz silver. If there isn't delivery - if there is refusal to deliver and settlement in cash, it ceases to be a market for the price discovery of actual silver b/c there is no silver. 

It becomes a casino for speculators, a place where those with the deepest pockets and the regulators in their pockets can send price up and down like a yoyo with no silver and no intention or risk of delivery. This is how price can be manipulated. You will never to called to deliver. You are dealing in an imaginary commodity. It is like a saleroom putting up prices of new cars at £10 - you go to buy a car you get a piece of paper saying the car will be delivered for £10. But you won't have one delivered. All you can do is cash the paper in. What has this got to do with the price of cars? The real value of the car is £10 000 but this is irrelevant b/c you will never get your car delivered. so you never actually bought a car. This would not be price discovery of cars, it is just a mechanism to control a number, a fictional price and designed to perpetuate an illusion of fiat having value.

This is entirely correct, I find it strange that someone cannot see it as it obviously is.

 

9 minutes ago, HawkHybrid said:

you can take delivery of your 500 ton of beans

whenever you want with the funds from the

contract.

but that is the issue, you can't take your money from the silver contract and buy the same anount of physical metal with it. it either doesn't exist or would cost you more than the contract price.

 

11 minutes ago, HawkHybrid said:

the problem with the comex being responsible

for physical delivery is it gets complicated when

dealing with contract owners half way around

the world. it's a practical logistics solution to

settle in currency and get contract owners to

sort out their own delivery of the physical goods.

the geographical situation is relevant and probably impractible in many cases but it should be possible, if you can overcome all this, to choose to receive, nay demand, the metal from your contract.

[Xander]

16 minutes ago, HawkHybrid said:

bean delivery service can do that for you locally

Futures commodity markets don't deal locally they buy from other countries, have been for centuries with no delivery problems.  

I don't see why all of a sudden delivery should be a problem, digital can't replace physical, to apply otherwise is misleading.

 

[HawkHybrid]

2 minutes ago, sovereignsteve said:

but that is the issue, you can't take your money from the silver contract and buy the same anount of physical metal with it. it either doesn't exist or would cost you more than the contract price.

yes this is true. those thinking they're smart(too

dumb to read the contract), and think they can

play the system to get around premiums for

silver have a surprise waiting for them. the

contract price is for the metal only. it does not

take into account local laws and taxes. once

you get the funds from the contract, it's down

to you to sort out physical delivery.

this is a better representation of the price

without the local laws involved.

 

HH

[sovereignsteve]

the main point is that price discovery will not work unless the physical exists to back up every contract. price discovery works on supply and demand; if there is an infinite number of contracts backing a limited amount of metal, then price discovery cannot possibly be valid. in the digital futures market there can never be a shortage of metal

[HawkHybrid]

the price discovery works because it takes out

the local law implications and delivery of

the physical metal.

the speculation on the infinite number of

possible contracts is a completely different

thing that always get mixed in with the

argument.

there's a football match, there's a possible

infinite bets being placed on the outcome of

the match. the bets having absolutely nothing

to do with the football match.(gamblers will

game on any event)

the football match results is not affected by

the bets that are put on it.

not being possible to corner the market via

the metals exchange is a good thing.(there's

no shortage of possible contracts). people

don't like it because they believe it is broken

when they cannot personally manipulate the

market to achieve their own goals.

 

you talk of supply of physical silver. who have

ever had a problem with buying online physical

silver bullion.(I'm I'm not talking limited number

coins or out of production specific designs. I

mean any silver bullion, all sold out)

all this bs about silver running out and

manipulated. looks like plenty enough to serve

the physical bullion markets.

 

a market discovery process that allows people

to globally have access to resources pretty much

on demand(provided there's sufficient funds).

this is a good thing.

 

HH

[Martlet]

7 hours ago, sovereignsteve said:

the main point is that price discovery will not work unless the physical exists to back up every contract. price discovery works on supply and demand; if there is an infinite number of contracts backing a limited amount of metal, then price discovery cannot possibly be valid. in the digital futures market there can never be a shortage of metal

The counter point is that traders in the contracts dont necessarily want delivery, nor do contracts guarantee delivery.  The market's eyes are wide open, the minters, jewellers, industrial users get the product they require.  If there was a problem in supply it would show up here, and the price of spot and futures soon rise.  

[sovereignsteve]

3 hours ago, Martlet said:

The counter point is that traders in the contracts dont necessarily want delivery, nor do contracts guarantee delivery.  The market's eyes are wide open, the minters, jewellers, industrial users get the product they require.  If there was a problem in supply it would show up here, and the price of spot and futures soon rise.  

Obviously not everyone will want delivery, I accepted that point, but it should be possible if you demand it. Not nearly everyone would. I can see how the system would act as a buffer preventing volatile swings in price. However, once you take away a direct connection to the physical it is all to easy to suppress the price artificially.

[HawkHybrid]

21 minutes ago, sovereignsteve said:

However, once you take away a direct connection to the physical it is all to easy to suppress the price artificially.

 

that's not how it works. if it was like that and

silver is being manipulated then in theory

there's no reason to not see wild shorting of

silver below the average price of production.

if lower makes shorters more profit then why

stop at $13? why not go all the way down to

$1 or less?

 

the futures market is an extension of the

physical market.

 

notice how the gold market has 30x the gold

contracts as physical delivery. this is easily

way more than the 1:1 ratio of futures must

be backed by physical delivery. is this price

suppression? (gold has gone up ~8% per year

on average since dec 2015)

it's all cherry picking by those who have

something to gain from pushing the conspiracy

theory.

 

HH

[sixgun]

https://www.tfmetalsreport.com/podcast/9587/important-discussion-andrew-maguire