Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
UK Housing Market Analysis, Trend Forecast 2022 to 2025 - Part 2 - 30th June 22
Stock Market Turning the Screws - 30th June 22
How to Ignore Stocks (and why you should) - 30th June 22
Top Tips For Getting The Correct Insurance Option For Your Needs - 30th June 22
Central Banks Plan To Buy More Gold In 2022 - 30th June 22
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Precious Metals Market Manipulation, Grab a Calculator Before the CTFC Investigation

Commodities / Market Manipulation Apr 14, 2010 - 02:47 PM GMT

By: Dr_Jeff_Lewis

Commodities

As the CTFC begins to investigate claims by a whistle blower that the precious metals markets have been manipulated by several large US banks, investors are left to ponder: “What will happen to silver if manipulation is found?”  Can you say, payday?


Silver’s Current Price

At just over $18 per ounce, silver is heavily underpriced considering both its historical prices, as well as the amount of inflation in the years since.  Since 1913 and the creation of the third US central bank, the Federal Reserve, the price of silver has advanced at a small discount to the actual rate of inflation.  The monetary base has grown from a few billion dollars to more than $1.6 trillion since 1913, all while silver has only increased by 3000%.  Though 3000% has been enough to accurately track the change in prices, it has done little to keep up with real inflation, that is, changes in the money supply.

Silver Consumption

Another factor in the price of silver is how much the metal is actually consumed in processes such as manufacturing electronic devices, creating silver jewelry, or processing film. 

In the last decade, silver has been readily consumed almost as quickly as it has been produced, with the largest driver of growth coming from the electronics sector.  In the same computer you're using to read this article, there are several grams of silver, most of which will never be recovered due to the economic costs of removing precious metals from electronics.  Some many years later, your computer will be thrown away, the silver will be hidden in a landfill, and it will never come back to the surface.  For all intents and purposes, it will remain unrecoverable, never to be used again.

What Happens When Manipulation is Found?

If the CTFC declares that the silver markets have, in fact, been manipulated, it is certain that the price of silver will skyrocket.  Most silver analysts think that the price of silver isn't being manipulated by pure trading.  Instead, they're convinced that the amount of silver being traded on the futures market is not 100% represented by physical metals.  This means there is more electronic silver being traded in the form of futures than what actually physically exists.  Therefore, as rare as silver is thought to be today, it will be even rarer than we once believed if the markets are being manipulated with excess futures.

Grab a Calculator

If you were to extrapolate the amount of currency in circulation in 1913 (roughly $10 billion) to today's figure of $1.6 trillion, you would find that the amount of money has actually grown by a figure of 160 times, or 16,000%.  Silver, by contrast, has earned 30 times its 1913 price, or 3000%. 

Clearly, there is a huge discrepancy in the numbers, opening up the possibility that should the markets be found to be manipulated by excess futures supplies, the price of silver could rocket from $18 per ounce to $90 per ounce – just by calculating the differential in the change of the amount of money and the performance of silver over time.  Take these figures to the bank.  If the silver markets are manipulated, silver will sky rocket.  If they aren't (by some miracle), you lose nothing.  Now that's a bet worth taking!

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in