by Michael Piromgraipakd
May 23, 2011
Welcome back, I hope everyone made it back from Rapture in one piece. Leaving where we left off last week before hiding in my underground shelter, I never had the chance to discuss or address the topic of Silver and it’s recent plunge on May 6, 2011 to $34.00 from it’s near historic high of $49 and some change. There are Gold Bugs and then there are the people who believe Silver will blow the socks off of Gold. Don’t tell but I am one. The week following May 6, people were calling the 30%, $15 drop a correction and I will admit I thought it was too. However, 30% in that short amount of time is not a correction and in the back of my mind I thought manipulation. Seeing as how $50 is considered the psychological threshold for silver and as other precious metals were skyrocketing, Silver breaking this barrier would have destroyed the confidence in the US Dollar. Of course no one wants the dollar or the economy to die, yet the Federal Reserve continues to print more dollars which in itself erodes and devalues the dollar. A hedge for inflation of course is Gold and it’s little sister Silver. If people load up on Gold and Silver and ditch the greenback, well guess what happens. So you see the irony in this. To keep metals at bay, someone must make more imaginary units of Gold and in this particular case, Silver in the form of ETF’s. It’s a vicious circle. Gov’t prints more money… people scared money will become worthless… people buy precious metals… Gov’t scared so they print more ETF’s which make metals drop in value. But the big “clue you in” moment here is, there are not as many real pieces of silver as there are contracts (ETF’s) for them. That means there is and there will continue to be a serious short squeeze in the physical silver market. For example, the physical stocks of silver on the COMEX continue to dwindle from 87,000,000 ounces in 2009 to a little over 32,000,000 ounces a mere 2 years later. That’s 27,500,000 ounces per year. This year there are 32,000,000 and if the “dwindle” rate is 27,500,000 in 2012 COMEX will have 4,500,000 ounces of Silver. You can imagine what will happen in 2013.
In searching for answers I came across this interview by David Morgan and other precious metals gurus discussing the recent events. Speakers include David Morgan (Host), Eric Sprott, Bill Murphy, Rob Kirby, Bob Quartermain, Sean SGTReport and James Anderson in for Mike Maloney.
Enjoy and Happy Rapture Day: