Silver Price and The Winds of Complacency

Not even a surprise Presidential election result could sever the bonds that have
held prices in check for more than 5 years.
From a mainstream media perspective, the financial system is a neat little house
of cards. Made to look like sturdy boxes on a hilltop; institutional pillars . that
are all the same. The cards are carefully controlled and non-random. They are
rigged.
Precious metals will always be rigged to some degree.
From imposed (gold) price standards to the London Gold pool era, and today with
a grotesque dominance via concentration on the CME Groups Commodities
Exchange (COMEX) the most important exchange and center of metals price
discovery on the planet.
The main difference now is that technology has made it easier to manage prices,
while the information age is used to dumb down the masses as to the reality of
supply and demand.
If that wasnt bad enough, government has legal (policy) mechanisms in place to
intervene at the behest of the political-financial class.
(Take a walk around the Gold Action Trust Committees website, GATA.org. Its
all very clearly documented).
The Exchange Stabilization Fund has a legal mandate to intervene in any market
as a strategic necessity. Admissions stemming from the most powerful elite make
it unquestionable that gold and silver are specific and important targets.

Yet, that these facts remain taboo is only a temporary phenomenon. Memes are
not hard wired. Like emotions, they are subject to the very lightest winds of
sentiment.
One would think that advertisements of volume trading discounts given to central
banks for futures trading would change the nature of that wind. For now, prices
are favoring the story, a dominant world view consensus that all is well.
Indeed, the mechanics of commodities price discovery is too complex to hold even
the brightest minds attention. Only a figment remains of what once was a
testament fair (not perfect) exchanges.
Price action makes market commentary and trickle down economics is the
ultimate justification for broken down policy. Yet, the mainstream debate (and to
a significant extent the hard asset world where the manipulation taboo) still reins
supreme.
But all of these so called debates end up coming around full circle back to the
issue of artificial and, by definition, non economical intervention.
For example, a reader wrote in recently questioning mining supply data. The
dominant world view assumption is that mining supply has been relatively flat.
Yet it is only down slightly. Or in other words, steady. And this must be an
indication of flat to lower prices, again based on the assumption that the prices
are the truth.
But rigged prices cover up an encyclopedia of truths. Very few pure silver mining
plays exist. Most silver produced as a by-product. Prices have been below cost of
production for the primary miners for years.
They are a slave to the system that rigs their prices. They are completely
dependent on the institutions that provide their credit and therefore will not dare
bite the hand that feeds them.
Calling a spade a spade in these markets would be like asking for more regulation
or asking credit lines to shrink or interest costs to rise. It slowly destroys the
system from the inside out.
Price discovery is a totally different arena. Futures markets are where price is
discovered for now.
Miners and users are no longer a part of that equation.
Keep in mind who publishes the data.

The silver institute and the GFMS Thompson Reuters are descendants of the
silver users, who obviously have a major bias for keeping prices low. Silver is a
miraculous commodity that also happens to be ancient money. (Ancient in the
sense of a bird or reptile not a dinosaur).
Mining goes along with the rest of the supply and demand data produced by the
financial class for the financial class. These are where monetary considerations
are covertly (or in many cases overtly) omitted from the data and nearly always
from the analysis.
The data comes via highly skilled analysis by perhaps some of the smartest in
the room. But the lenses they are looking through are distorted. Its starting from
a faulty set of biases. A false premise.
The system is just smart enough to be good at what it does, but not smart enough
to question the true benefits, the deeper meaning.
Silver has a monetary demand component that surveys and interviews cannot
convey. Immeasurable and not unique to silver in and of itself; paper used in the
silver market to manage the price for profit has no other match. Paper derivatives
are what drive price. Paper is infinite until the wind of sentiment changes.
Because it is profitable and convenient to suppress prices, we have the in which
the price is far below inflation (by virtue of base money supply) adjusted highs
even by conservative measures using average prices without the spike from
1980.
Again, there is no conspiracy about price manipulation. Its just a set of facts
easily proven by the data provided by the CFTC.
Its done right out in the open, similar to interest rates, equities, or forex.
While there should be a relationship between real supply, demand, and price it
is obscure at best. The directional movement of world price depends on how the
large commercial traders on the COMEX decide to make it.
Short term, if its profitable for them to move the price lower, they will do it. And
when they are positioned to let the price move up they will let it.
Long-term, that which is ripe for disruption always disrupts eventually. We saw a
glimpse of this between August 2010 and April 2011 when price discovery
briefly, yet undoubtedly shifted away from paper to physical.
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