Backwardation and the fall of the bankers
- Thread starter peilthetraveler
- Start date
As I recall there was no "fail-to-deliver" in the 70's when the Hunt family tried to corner silver. It went to around $50 as Paul Volker at the Fed pushed up rates. The prime rate broke 20% and the whole corner collapsed like a house of cards. It is hard to fight the Fed if the guy who sits in the Chairman's office has balls. And Volker's were brass.
To illustrate how far a market can move in a short period of time I was on the floor (I had to meet someone and security was casual in those days) when silver broke $5 seven or eight years before it hit $50 and weeks after it hit $50 (or thereabout) it traded under $30.
To illustrate how far a market can move in a short period of time I was on the floor (I had to meet someone and security was casual in those days) when silver broke $5 seven or eight years before it hit $50 and weeks after it hit $50 (or thereabout) it traded under $30.
Quote from TGregg:
I think it was the Hunts who were the main cause of one of the silver failures. But it's a dim memory, probably not helped by the various adult beverages being consumed during the listening.
. [/B]
Thats only for numismatic value. ASEs may get a little above spot but maybe a $1 at the most. Aside from that, you get paid spot if you're lucky or below.
That being said, recently sold some unique silver bars and some junk silver within a day and at fair market value. All from a post on craigslist. The guy that bought it is doing it for clients and will buy at fair market value.
If the price spikes and the short sellers do not have physical silver, then comex is on the hook for the balance. What is happening is a physical short squeeze...some big money guys are likely behind this....they will force delivery and when they cant get it,they will basically set the price of silver which will cause more shorts to default which will put comex on the hook for the balance. Basically we could see a huge runup. Silver needs to be at about $80 per oz to trade at what its found at naturally in nature. (17.5 silver to 1 gold) Add in the current scarce supply side, and you are looking at a ratio that could go 10 to 1 or even lower. (I've heard some people saying that silver could possible trade close to golds price if enough people are hording it.)
There are so many reasons why silver is a screaming buy right now.
no way silver is a screaming buy right now, the risk is too high for new longs. Risk in silver has always been asymetric, to the downside.
Also regarding the failure to deliver, exchange participants have no incentive to require delivery at expiration. They get the spot price at expiration, +- change in their mark-to-market account.
So they can buy the physical in the spot market anywhere if they really want physical delivery. But again as someone said most participants don't want delivery.
Also regarding the failure to deliver, exchange participants have no incentive to require delivery at expiration. They get the spot price at expiration, +- change in their mark-to-market account.
So they can buy the physical in the spot market anywhere if they really want physical delivery. But again as someone said most participants don't want delivery.
BOOOOOOOOOOOOORING.
LOL @ moving this to metal futures. Should have gone to chit chat though.
Nope, definitely found a good home in Metal Futures. News has credible sources and is relevant. This, is crazy talk involving crazy people who need better things to do. Speaking of people like that........
LOL @ moving this to metal futures. Should have gone to chit chat though.
Nope, definitely found a good home in Metal Futures. News has credible sources and is relevant. This, is crazy talk involving crazy people who need better things to do. Speaking of people like that........
What an edge.