The “paper smash” that was surely designed to SCARE investors away from the metals has done exactly the opposite. It was in retrospect a MASSIVE MISTAKE! Previous to take down 3 weeks ago we believed that the physical market was “fragile” at best, now we have proof that we were correct in this analysis. Now the question becomes, “can they put this back into the box?”. Can they calm the physical precious metals markets? My guess is that they cannot unless…one of two or both of two things happen. Some way, somehow“sufficient supply” must show up in the cash markets OR the price must rise(and by rise I mean dramatically) in order to ration out the existing supply.
Nothing causes a buying panic greater than a shortage. In other markets a shortage may be just an inconvenience, a shortage in gold and silver will in itself actually create higher demand due to their being Giffen goods.
A complete and total RUN on physical metal supplies and inventories has never ever been more ripe than it is now. “Is this it? ..or can they put it back into the box until a later date?
The very real danger now is that what has been started begins to snowball.
Submitted By Bill Holter, Miles Franklin Ltd,:
We are now 3 weeks out from the paper massacre of the Gold and Silver prices. We immediately saw (as in THE first day) massive physical demand from all over the world explode as shortages and premiums in Gold (and particularly Silver) came about. The stretching of delivery (if even available) times and increases in premiums over “spot” prices came about from day one and so far show no signs of easing. “Is this the one?” Do the paper and physical markets separate from here further or do they converge again?