Don, Colorado Gold

[Mossy]

I'd like a second opinion on what he is saying at the bottom of this post:

http://www.coloradogold.com/archive/Job ... -1050.html

That the Comex has changed the rules so silver futures cost more, so the actual cause of the drop in silver spot is due to people getting out of silver futures. He says physical silver is still very difficult to obtain.

[Rodebaugh]

I'd like a second opinion on what he is saying at the bottom of this post:

http://www.coloradogold.com/archive/Job ... -1050.html

That the Comex has changed the rules so silver futures cost more, so the actual cause of the drop in silver spot is due to people getting out of silver futures. He says physical silver is still very difficult to obtain.

That the Comex has changed the rules so silver futures cost more, so the actual cause of the drop in silver spot is due to people getting out of silver futures. (TRUE IMO)

He says physical silver is still very difficult to obtain. (small- NO) (in volume- I Don't know but many say yes)

[Mossy]

He says physical silver is still very difficult to obtain. (small- NO) (in volume- I Don't know but many say yes)

LOL, check his minimum order sizes. Probably what he has in mind. ("500 ounce minimum"?)

[Lemon Thrower]

i agree with him but what you need to realize is there are 2 different markets - the comex paper for 1,000 oz bars and the retail market. when he says physical is tight he means for actual 1000 oz bars. there are maybe 100 paper contracts for every actual contract. increasingly, holders of paper are standing for delivery of that 1000 oz bar. expect fireworks at the end of the month.

[Sheba]

Lemon Thrower ... a little more light, if you don't mind, on your comment about 'fire works the end of next month'.

Do you mean a lot of 'paper gold' holders will demand delivery of the actual physical they bought and the seller(s) won't be able to come up with the physical? That could indeed cause fireworks of a major kind.

thanks,

sheba

[argent_pur]

Selling metal one doesn't have (short selling) and selling metal that has yet to come to market (forward selling) are common practices in the PM market.

[Sheikh_yer_Bu'Tay]

When someone sells short, they are selling something someone else has loaned to them. They then settle up with the real owner and keep the difference as profit. The "naked shorts" are the biggest problems. They can't deliver the real stuff because they never owned it in the first place, nor do they have an owners permission to sell borrowed inventory.

When a "naked short" gets caught in a price squeeze, they default. They can't deliver the goods, so they have to buy back the order with cash. If they can't deliver the cash, that's when the fireworks fly!

Ted Butler offered a good limerick about naked short sellers: "He that sells what isn't his'n, must buy it back or go to prison!"

[Lemon Thrower]

fireworks means this. increasingly comex paper silver holders are standing for delivery. comex has less and less silver. either the price goes way up to attract more silver or there is some sort of negative even - real or manufactured - that drives the price down. end of the month is when the contracts mature. don't know the exact date. the shortages are more acute in silver so you'll see the fireworks there first.