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REPLY TO THREAD
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Risk off event potentially coming. DO NOT SELL YOUR SILVER.
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Original Message
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This is an important thread:
Thread: Silver Madness
There are always hyperbolic silvertard threads on GLP. It is a regular feature, and normally whatever the story claiming that silver is about to explode, it is total crap.
But this is different. The behavior in the silver market that has developed over the last couple of months is different from the past, and the moves by foreign central banks have been pretty unprecedented in most of our lifetimes.
If there truly is a physical silver problem, which there really seems to be at the moment, TPTB have a couple of choices to maintain their program of price suppression.
One is to let prices run higher and stay on the bid, so they can collect physical from early sellers. Despite the obvious objection that this undermines their core goal of price suppression, it also does nothing to solve the problem, if, in fact, there are few natural sellers of size physical at slightly higher prices. Which is likely the case. Most holders of physical silver are not looking to collect a few bucks per ounce. They are strong hands, and driving up prices will not help the TPTB.
The other strategy, and the one I am here to warn you about, is a serious risk-off event that would drive prices of all assets down in a panicky manner. This strategy causes all kinds of pain for all kinds of financial player, but by forcing many players to disgorge assets, including silver, at fire sale prices to cover other losses, it allows the TPTB to turn those derivative positions into physical silver.
Moreover, the panic provides cover for outright theft, ala MF Global, although in this case, you would expect there to be some kind of "error" at a warehouse, where inventory disappears, "owners" realize they've been screwed, some mid-level hack takes the blame, and any compensation is years down the road in devalued dollars. Meanwhile, the thief (aka TBTF bank with high-power legal) gets his hands on physical.
In short, my warning now is to
a) decrease leverage
b) do not sell your silver, no matter how frightening any upcoming down move is. TBTP could easily flush silver prices down to the $16-$18 level. It would scare some people into vomiting out inventory even as others would find that their local coin shops are all sold out (you could not actually obtain any physical silver at anywhere near the "market" price).
c) when you see the momentum of the down move starting to reverse, if you have cash and can find someone willing to sell physical, buy with both hands.
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