The Coming Silver Crisis

Pakalert October 31, 2010 2
What determines Price? According to Adam Smith, it is the “invisible hand” of the marketplace. Price is where Supply meets Demand. So what happens when you manipulate Supply or Demand? You control the Price. It really is that simple. The fact of the matte is, that we will shortly witness the “Great Disappearing Silver” caper of 2010.

This will shortly occur when 100% of the silver that only exists on paper disappears from the marketplace. Yes, the Banksters have once more proven that fractional reserve lending has more than one useful application. It is always in their best interest to suppress metals prices as long as we continue to use their worthless paper as currency.

“Nelson Bunker Hunt and Herbert Hunt, the sons of Texas oil billionaire Haroldson Lafayette Hunt, Jr., had for some time been attempting to corner the market in silver. In 1979, the price of silver  jumped from $6/oz to an all-time record high of $48.70/oz. The brothers were estimated to hold one third of the entire world supply of silver (other than that held by governments). The situation for other prospective purchasers of silver was so dire that the jeweller Tiffanys took out a full page ad in the New York Times, condemning the Hunt Brothers and stating We think it is unconscionable for anyone to hoard several billion, yes billion, dollars worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver. (Source)

Back then, things were so much easier. For a few billion dollars, the Hunt brothers were able to bring the silver market to its knees. They did this through selling futures on their actual silver holdings, and using borrowed money to buy additional futures contracts. In other words, the Hunt Brothers were heavily leveraged and became easy targets for those that wanted precious metals prices to remain low.

But on January 7 1980, in response to the Hunt’s accumulation, the exchange rules regarding leverage were changed, when Comex adopted ‘Silver Rule 7’ placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets.” (Ibid)

If it sounds similar to the stock market crash of 1929, where borrowed money, or margin, was also removed from the market by the Banksters, then we are all making progress in our understanding. Borrowed money is never a good investment tool. The Banksters just raise rates or increase margin requirements and the whole overinflated scheme comes crashing down, like it did with the Hunt Brothers.

With the Hunt Brothers, the Banksters raised credit requirements for investors in the silver futures market.  The silver was real, but the money was fake. Take all that fake (borrowed) money out of the market, and the price of silver falls. The Hunt Brothers had created artificial demand (much higher than actually existed) for silver, and price responded by going through the roof.

Today we have a totally different problem. Through the use of silver derivatives (Options), the Banksters have created a huge supply of silver that only exists on paper. This worthless paper is traded just like the real thing in the Options and Futures markets. By trading this non-existant silver, the Banksters can control price by inflating Supply. It is estimated that for every real ounce of silver out there, there are 100 paper ounces being trading in the Options market.

It isn’t rocket science.

“In April 2007, Commitments of Traders Report showed that four or fewer traders held 90% of all short  silver futures contracts totalling 245 million troy ounces, which is equivalent to 140 days of production. According to Ted Butler, one of these banks with large silver shorts, JPMorgan Chase, is also the custodian of the SLV silver ETF. Some silver analysis have pointed to a potential conflict of interest, as close scrutiny of Comex documents reveals that ETF shares may be used to “cover” Comex physical metal deliveries. This led analysts to speculate that some stores of silver have multiple claims upon them. On 25 September 2008 the CFTC relented and probed the silver market after persistent complaints of foul play.On September 1, 2010, Bloomberg reported that JPMorgan Chase will be closing their Proprietary Trading Desk.” (Source)

Now, in a few weeks, this massive financial fraud will reveal itself when real silver investors take possession of real silver and refuse to sell any new futures contracts against the silver they already own. When 99% of the silver that only exists on paper is vanquished from the marketplace, which will take place after this coming election, silver prices will correct to their real value. That means a $29 ounce of silver will be worth $2900. Do the math.

Add to that a collapsing economy, hyperinflation, stock market collapse and a worthless dollar and silver bullion will quickly be bought up by those smart enough to understand the implications of this article. When prices start moving up dramatically, Bullion Operations and Sales will cease and price will move into the stratosphere.

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  1. er November 1, 2010 at 6:34 am - Reply

    you folks really have hammered the final blow on the nailshead of what has been going on for decades in the silver market along with Ted Butler, my investment hat is off to you, keep up the good work. It is my hope that the Kenisians are lynched and we return to some type of precious metals backed currency.

  2. Critical Thinker November 1, 2010 at 1:22 am - Reply

    Very insightful: pointing out how the Hunts’ market manipulation is a mirror image of the current manipulation by JP Morgan.

    As someone with a large long silver position, I wish I could agree with your projection of the silver price to $2900/oz. One problem is that demand for non-investment silver will almost certainly contract if the price should rise too steeply. Of course, if hyperinflation hits, your $2900 target is bound to be way too low.

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