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silver breakout

blast-off

Many of us who seek bits of stability in an unstable world use “beans, bullets and bullion” as our foundation. That refers to storing some food in our pantry, some precious metals ‘under the bed’ and having some means of defending our life, liberty and property. Many bullion watchers have concluded that the most stable anchor and most undervalued is silver.

I am not here to post another entry on why buy silver and the reasons therefor. You can read my thoughts on the subject by clicking here or the Category to the right called “economics”. A major portion of those explain silver as a store of value. No, today’s post is to note the apparent breakout of silver’s artificially low price.

The great economic manipulators of the world have wanted us to trust their paper currencies. It is in their interest that we stupidly treat their paper promises as if those Federal Reserve Notes (FRNs) were the only medium of exchange we can imagine.

Probably their most important tool has been the silver Exchange-Traded Funds (silver ETFs). These represent over 80% of the silver market. Trading empty paper promises of silver amongst themselves keeps the price of real silver low and volatile… or, from the casual observer’s point of view, unstable and unreliable as a store of wealth. Every time the price of silver threatens to rise, they trade a huge volume of paper silver at an artificially low price to beat it back down.

This is a bit of a problem on their side as they have huge risks that someday, somebody will demand delivery of the silver they promised with their notes. It is a bit of a problem to users of silver as they have to wait months for delivery of physical silver at the artificially low price of the current market. Unquestionably, the law of supply and demand will eventually rule the market. When is the real question.

It will be a lot easier to know in a few weeks and much more certain in a month or more, but it appears to me that silver tore through the paper ceiling over the last three days.

Hang onto your hats.
rough-road-ahead