Sunday, May 8, 2011

Is The Silver Sky Falling?

The spot price of silver took a bit of a tumble recently, sending silver-futures prices down to $35.28 an ounce from nearly $50 in just five trading days. The prime culprit was the COMEX, which increased its margin requirements 84% during the week. Margin calls came in fast and furious, forcing many small speculators to sell their positions to cover. The COMEX (sometimes called the CRIMEX), claims the increased margin requirements were instituted to decrease the "volatility" in silver futures trading. Others say it was a last ditch attempt by the troubled trading entity to avoid default, due to woefully inadequate silver reserves on hand to cover paper positions.

No matter what you chose to believe the question still remains: Is the silver sky falling?

Firstly, the bullish long-term financials of silver have NOT changed. See Why You Must Buy Silver Now!

Secondly, the paper spot price of silver may have been manipulated downwards, but physical silver is already recovering. I've seen rolls of silver eagles and junk silver recently selling on eBay for as much as 20% above the current spot price. I like eBay because it illustrates what the "real market" price is for silver coins, bullion, etc. The banksters can manipulate the paper spot price with a variety of shady tactics, including raising margin requirements, but the thousands of small auctions happening everyday on eBay are beyond their powers (or even notice). In addition, huge internet sellers like APMEX are not only out of silver eagles until May 13th, but they're charging (and getting) a $5.29 premium on each eagle they sell. All indications are that any physical seller that actually tried to sell close to spot would probably be out of stock in a matter of hours.

Lastly, trust in your physical silver. Continue to buy on the pullbacks. Check out the latest "silver bears" video­=u9LcKcXpCDE for some interesting insight into the insider manipulations behind the present price drop. WARNING: The bears work blue. If strong language bothers you, beware.

My opinion? The Silver Sky is NOT Falling!


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