I tripped over a Mogambo Guru essay today where he tosses out a tidbit I intuited, really knew, but had never seen in print. The lack of sense in the silver market has smacked of manipulators selling paper silver (certificates and promises) to each other to keep the price from reflecting its true value and stability against the fiat dollar. Today, he added the key facts to the picture for me.
In his essay here, he describes historical production and consumption of silver leaving an estimated 1 billion ounces available in the world-wide silver market, and that number is going down as consumption exceeds production. Later he puts the final piece of the puzzle in place with the estimate that 1 billion ounces in naked shorts exist in the silver market.
Selling short is a gamble that the price will be lower when you are called to pay for the sale. A naked short means the silver you promise to pay with doesn’t exist. With beautiful symmetry, the manipulators have exactly matched the quantity of actual real silver being bought and sold with their paper promises of nonexistant silver to be delivered on demand ‘someday’.
The only way this won’t send the price of silver skyward is if those who are selling naked shorts are allowed to confiscate silver and make private ownership thereof illegal. Of course you KNOW that can’t happen as long as there are 60 million gun owners in the USA. Thus, obviously, you have a lot of silver bullion along with your beans and bullets, don’t you?
Below is a clip from the Mogambo Guru article:
“…the point is that you would be buying gold, silver and oil if you had any smarts, or even a vague, passing familiarity with the entire historical record of what happens when a government is so corrupt that it deficit-spends, and especially when it compounds its folly by paying for it with the creation of a fiat money!
And it is doubly especially about how you would be buying gold, silver and oil when the state and local governments do the same borrow-and-spend-o-holic thing, and triply especially when the people themselves have borrowed and spent so much that they cannot pay their debts because they owe around 400% of their income! Hahahaha!
Then, as I suggest, combine all that with an estimated billion ounces of silver sold naked short (the actual silver doesn’t exist) in “paper silver” transactions, plus what Mr. Cook calls a “runaway market when the short sellers on the commodity exchanges are trying to cover, and the nonexistent silver in pool accounts is being bought back,” with huge additional demand coming from “shell-shocked industrial users, attempting to stockpile silver to keep their doors open, and inflation-ravaged investors pouring in as the price rises”, and suddenly the case for buying silver now is compelling!…”