Silver: The House Always Wins, Until Now

[Country]

Something has drastically changed in the silver market. The banks that once controlled the price of silver are now closing positions at a loss...Regardless of the actual reason the commercial shorts have begun to bleed money. And when blood spills, sharks will circle. Hedge funds and traders that never even thought of silver before will begin to squeeze the shorts. If the big banks don't quickly regain control of the silver market they may lose it forever.

While it can be speculated on how short covering could impact the market, a short squeeze could feed upon itself as it attracts capital. In five trading days of buying a net 3286 contracts, the price of silver rose by $1. However, the commercial banks are still a net 62,127 contracts short so at that linear rate it would take them 94 trading days to cover with a silver price of roughly $117. The resulting losses would be around $15 billion. Of course, markets aren't linear and after the second or third week of covering traders would begin to purposefully front run and squeeze the commercial shorts. So its unlikely that the positions could be covered that low or if at all. Unfortunately, those who were hoping for a correction to accumulate more silver may not get it here as a price reset may be on the horizon.

http://seekingalpha.com/article/229283-silver-the-house-always-wins-until-now

$117 SILVER - 90% coins at 83.7X face: SILVER dimes at $8.37, quarters at $20.93, and halves at only $41.85..... Would be nice, wouldn' it??

[misteroman]

if silver dimes were 8.37 each I might start thinking about cracking dime rolls!

[Rodebaugh]

Time to pay off some debt at those #'s.

[TXBullion]

if silver dimes were 8.37 each I might start thinking about cracking dime rolls!

Definatly would have to be at least 20.00 each before i even think about ordering a box of dimes

[Neckro]

We could all wish

[beauanderos]

I just hope the price reset, whatever it might be, occurs without hyperinflation... so we can have some fun spending the sudden windfall

[MO-SILVER!]

Yeah I was figuring what I would end up at with silver at $117.... Where would gold go with silver hitting those sort of numbers I wonder.

[Country]

Yeah I was figuring what I would end up at with silver at $117.... Where would gold go with silver hitting those sort of numbers I wonder.

Since this move would be sort of a short squeeze for SILVER, GOLD would appreciate too. If SILVER got to $117, you could see a similar, although not as great, short squeeze in GOLD. I would guess that the GOLD/SILVER ratio should fall to around 20-40. At 30, that would give you $3500 GOLD as a good guess.

[HoardCopperByTheTon]

Been there before.. but it's been about 30 years. If you adjust for constant dollars it probably would not be far off the peak in 1980. At those levels the spread between spot and what you can really get in the marketplace tends to get pretty large.

[Lemon Thrower]

the hunt bros went broke when the house change the rules.

it will not be any different this time.

that is why you hold physical rather than the promise of a counterparty to a futures or options contract.