CrushTheStreet.com will be writing a special detailed report that will EXPOSE the Fed and will be releasing it this Friday. STAY TUNED!!!
This Week In Silver!
During the silver meltdown we had this week, many of the bullion dealers were selling out of all of the physical silver. You have to wrap your mind around the concept that there is no one that has the ability to sell 1 billion ounces of physical silver for 27 dollars an ounce. It is the paper markets that are experiencing this phenomenon. When prices dropped that low, the physical disappeared and quite frankly did not drop nearly the amount the paper markets fell, because those that were selling were selling well above spot.
Silver is not getting the respect it deserves over the past few weeks and even couple months. It wasn’t too long ago when it was going up parabolically and everyone was talking about it. Not getting too emotional during the major swings will help individuals who are entering the silver market. Understanding the macroeconomics of why this metal is so undervalued explains why we at CrushTheStreet.com are in this for the long haul.
Our friends over at FutureMoneyTrends.com recently released an in-depth analysis on the silver markets. If you have not had an opportunity to watch this video, definitely take the time to watch it.
Aside from the economics, lets look at the distortions.
CrushTheStreet.com has repeatedly discussed the serious disconnect between the paper price of silver and how it translates to the silver metals price. The primary purpose for the silver markets of futures and options exist so that the silver market functions smoothly for price discovery and so that it mitigates risk for participants. It does not exist to set the price for the commodity. As we’ve come to find out, the paper markets are highly manipulating the spot price of physical silver. According to the Silver Institute, they have estimated that physical demand was 1,056.8 million ounces which comes out to 38 million ounces a month. There has been a creation of additional ounces of paper silver that is currently distorting the markets. The disparity is estimated to be a 500 to 1 (paper silver to physical). This is some serious manipulation and something that will be unsustainable because one ounce of paper silver is not being backed up by a physical ounce. A tsunami of demand and a run on the paper markets could send silver skyrocketing. CrushTheStreet.com believes that if silver continues to drop below 24 dollars an ounce, there will be a frenzy in the market that (as discussed in the FutureMoneyTrends.com silver video) “all hell will break loose.”
BrotherJohnF discusses in one of his latest videos that we’ve posted on our front page how that paper trades in ONE DAY are equaling roughly more than 5 times the amount of total physical that is being mined in 1 YEAR. The idea that all this money is being diluted into billions of fictitious ounces rather than properly reflecting the true value of the physical metal.
This video is currently featured on our front page. CLICK HERE TO WATCH!!!