Guest Post: Anatomy Of Silver Manipulation - How Low Can It Go?

Tyler Durden's picture

From Avery Goodman, first posted on Seeking Alpha

Anatomy Of Silver Manipulation - How Low Can It Go?

As we warned
our readers on May 1, 2011, when silver had clawed its way back to
about $48 per ounce: “We expect another massive price attack in the next
few days.”

We came to this conclusion based upon a
number of factors, including the impending opening of the Hong Kong
Merchantile Exchange, which will be controlled by many of the same
international players who control NYMEX. Like clockwork, a vicious
attack, perhaps the most ferocious one ever mounted in the history of
precious metals, began on Monday, May 2, 2011. We knew it was coming, but to be honest, we didn’t expect the level of ferocity. Following
our own suggestions, when silver had tanked by about 18%, we entered
into a small speculative long position, using the SIVR silver trust. The price punched right through the minor support level we had chosen, and continued down.

Had
we realized the depth of the silver short seller despair, we would have
played the game a bit differently. We would have waited longer, bought
a lot more later on, and created a much longer term position. As it is,
we have lost nearly nothing, and will do it anyway. Nevertheless, as
irrational as this kind of thinking is, and as much as we warn people
against it, human beings are human beings and we are not happy about
putting on a little bet, no matter how small, that fails to catch the
bottom of a dip.

The level of despair among short sellers, which
is motivating this attack, is growing. Anything could happen at this
point. They could give up entirely, or the attack could become more
ferocious. We don't know. What we do know is that the short sellers'
predicament has just grown worse. They will eventually become even more
desperate than they are now as weeks and months pass by. We will
explain why shortly.

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