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The Beginning Of The End Of Precious Metals Manipulation: The London Silver Fix Is Officially Dead

Tyler Durden's picture




 

Following a crackdown on precious metal manipulation by various European regulators (mostly Germany's BaFin, recall "Precious Metals Manipulation Worse Than Libor Scandal, German Regulator Says"), which led to the shocking outcome that Deutsche Bank would pull out of the London gold and silver fixing committees, the London Silver Market Fixing company ended up with a most curious outcome: it would have just two members: HSBC and Bank of Nova Scotia. And, as an even more shocking result, overnight the London Silver Fix announced that after August 14, 2014 it will no longer exist - the first of many victories for all those who have fought for fair and unmanipulated precious metal markets.

From the press release:

The London Silver Market Fixing Limited (the 'Company') announces that it will cease to administer the London Silver Fixing with effect from close of business on 14 August 2014. Until then, Deutsche Bank AG, HSBC Bank USA N.A. and The Bank of Nova Scotia will remain members of the Company and the Company will administer the London Silver Fixing and continue to liaise with the FCA and other stakeholders.

The period to 14 August 2014 will provide an opportunity for market-led adjustment with consultation between clients and market participants.

The London Bullion Market Association has expressed its willingness to assist with discussions among market participants with a view to exploring whether the market wishes to develop an alternative to the London Silver Fixing.

Q&A

1. What will happen after 14 August 2014? Will the Silver Fixing cease to exist?

With effect from the close of business on 14 August 2014, the Company will cease to administer a Silver Fixing, and a daily Silver Fixing Price will no longer be published by the Company.

2. What will happen in the period up to that date??

The Company intends to continue to administer the daily Silver Fixing and publish Silver Fixing Prices throughout that period.

3. Why a three month notice period?

Although members of the Company may resign on seven clear days' notice, the members have confirmed that they stand ready to continue the Company's operations until (and including) 14 August 2014.

4. What happens after 14 August 2014 for market participants with contracts referencing the Silver Fix?

The Company is not in a position to comment on such matters, but market participants can speak to their contractual counterparties.

5. What does this mean for the gold, and platinum and palladium fixing companies?

This decision relates only to the London Silver Fixing administered by the Company. The Company is not in a position to comment on other fixings

* * *

This huge loss for precious metal manipulators fixers was amusingly "explained" by the FT's John Dizard as follows: "The field may be more level, but there are not enough players left for a game." Mocking those who prefer unmanipulated markets, he said:

... once that satisfying self-righteous feeling passes, the dwellers on BaFin Island might want to consider whether they have helped create a level playing field without enough players for the game. So far, it would appear the significant beneficiaries of BaFin’s persuasion have been the less-than-systemically important dealers in international silver markets. While there will still be four participants in the London gold fix, the similarly structured 12pm London silver fix will now have only two participants, which common sense tells us means no real market at all.

Actually, it will mean no manipulated market by a handful of participants. It will also mean that going forward a much more transparent pricing mechanism will have to be adopted: once which relies on, gasp, the entire market, not just legacy firms that operated for decades out of Rothschild's wood-panelled London basement.

Of course, for Gizard, there is no manipulation:

Deutsche Bank will have withdrawn from participating in the ritual of setting a standard price for physical gold. While no wrongdoing by any of the gold-fixing participants has been proven legally, or even, I believe, convincingly demonstrated in econometric modelling, Deutsche apparently came under intense social pressure from its home regulator to withdraw.

Correct, because banks withdraw from lucrative operations due to "social pressure", not because they know full well some legal arm is about to crush an existing arrangement with elements of criminality. While we are delighted that Mr. Gizard will disagree, we are confident that after August 14 the price discovery model, while certainly not free from manipulation, most certainly originating from the BIS' Basel Offices, will be a far better one.

One can only hope that in the future all vestiges of gold and silver manipulation will eventually disappear resulting in what may be the first real price discovery of precious metals, absent central and commercial bank manipulation. 

It is the same FT that we go to for some additional color on today's stunning outcome:

It was born in the late 19th century when a handful of London bullion dealers agreed to meet daily under a cloud of cigar smoke to set the price for the “devil’s metal”. But now, after 117 years of operation, the London silver fix – the global benchmark for the metal – is on its deathbed.

 

The three banks that run the auction announced on Wednesday that silver prices would be “fixed” for the final time at noon on August 14. The move follows increased scrutiny by European and US regulators into precious metals price-setting following the Libor scandal and probe into possible forex market abuse.

 

Deutsche Bank last month resigned its seats on the silver and gold fixes, after failing to find buyers. That left just two members on the silver fix, HSBC and Bank of Nova Scotia.

 

Market participants said the benchmark process, which occurs via teleconference and allows miners, financial institutions and jewellers to trade silver and value their stocks and contracts, could not function properly with fewer than three members. The UK’s Financial Conduct Authority asked Deutsche Bank to stay on for an extra three months to allow for the benchmark to be wound down smoothly.

 

“Deutsche Bank has postponed its resignation from the London Silver Market Fixing from 29 April 2014 to 14 August 2014, at which point the benchmark will terminate,” the bank said in a statement on Wednesday.

In other words, the FCA - undoubtedly in conjunction with the Bank of England - pushed hard to keep the existing manipulation structure in place for three months, effectively against the will of the German regulator, and of Deutsche Bank itself which wanted to get out as soon as possible.

As for what happens after August 14, when the London Silver fix is officially gone, we can't wait to find out.

In the meantime, we are confident the existing members of the mirror fix, that of gold, will be scurrying under rocks to avoid all public exposure. We plan to spoil their plans later today when we profile just who they all are.

Finally, a reminder of what the once proud tradition of gold price fixing looked like back in the day.

 

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Wed, 05/14/2014 - 09:58 | 4758659 semperfi
semperfi's picture

If you think food inflation is bad wait until you see silver inflation!

Wed, 05/14/2014 - 10:00 | 4758678 MillionDollarBonus_
MillionDollarBonus_'s picture

But what if the prices of gold and silver keep falling despite this change? Will silverbugz and goldbugz admit that they were wrong? I doubt it, because that would require them to come to terms with their own incompetence and give up their dreams of becoming kings of the apocalypse.  

Wed, 05/14/2014 - 10:03 | 4758690 SafelyGraze
SafelyGraze's picture

fortunately, now that etf's are well established we no longer need the silver fix

Wed, 05/14/2014 - 10:04 | 4758703 cifo
cifo's picture

MDB, if the prices of gold and silver keep falling, a few mines will probably close for being unprofitable. The supply will fall too, and the market will take care of the rest.

Wed, 05/14/2014 - 10:07 | 4758722 Pladizow
Pladizow's picture

Comex silver will be slammed that day, so the Bankers can say, "See, you need us."

Wed, 05/14/2014 - 10:15 | 4758765 Latina Lover
Latina Lover's picture

You can be certain that the banksters already have another means for fucking us.  Perhaps they will dispense with the illusion of a free market and give us full in the face fascism.

Wed, 05/14/2014 - 10:26 | 4758774 Tao 4 the Show
Tao 4 the Show's picture

The word "fix" has multiple meanings in English. One wonders if these guys had a twisted sense of humor when they came up with the name.

"Damn, we can't make any money with all these price fluctuations. Let's FIX it!"

"If they ain't broke, let's FIX it!"

"Out of drugs, man. I need a FIX!"

(Spoken with uppity Brit accent)  "Those Americans will never do it properly. Obviously, the situation needs a London Fix."

Wed, 05/14/2014 - 10:27 | 4758825 SumTing Wong
SumTing Wong's picture

6. So does this mean I have about three months to stockpile silver before the low prices go away?

A: While we can't predict what will happen to the price of silver, you can be damned sure that we called the US Mint and the Royal Canadian Mint last week and ordered up a shitload. It got delivered yesterday, so we felt good about making the announcement today.

Wed, 05/14/2014 - 10:30 | 4758831 J S Bach
J S Bach's picture

This is all bullshit.  I'll believe the "fix" is over when silver reaches its natural 15-to-1 ratio to gold.

Wed, 05/14/2014 - 10:43 | 4758840 Pinto Currency
Pinto Currency's picture

This seems to be a key sentence:

"So far, it would appear the significant beneficiaries of BaFin’s persuasion have been the less-than-systemically important dealers in international silver markets"

Looks like the market was going aroiund the LBMA and, sniff, it was becoming irrelevant.

Watch next the platinum and palladium markets.

Small markets with no central bank inventory and with S.Africa and Russia in play, seeing real supply constraints (and likely serious physical hoarding by industrial users).

Palladium lease rates moving up smartly.

Wed, 05/14/2014 - 10:44 | 4758910 old naughty
old naughty's picture

What's with mid-August? Everyone got into habit of setting own deadlines?

Wed, 05/14/2014 - 11:29 | 4759116 knukles
knukles's picture

Why do you all think it was called "fixing" the market, FFS?
Damn good thing they don't manipulate the paper and physical markets any other ways, isn't it?

Fuck off, peasantry.

Wed, 05/14/2014 - 11:34 | 4759142 V in PA
V in PA's picture

August 8 2014 or 14-8-14 or 8-14-14 is the number of the "The Subsisting, The Guardian"

And they say the elites don't communicate with numerology.

Wed, 05/14/2014 - 12:03 | 4759288 Four chan
Four chan's picture

the london naked shorting exchange headded by chase opens that day.

now that i typed it, it sounds like a real thing...because it is mua ha ha ha

Wed, 05/14/2014 - 13:16 | 4759613 Arius
Arius's picture

 

 

BoA, Morgan Stanley and the rest of Team Desperato calling for top 1300 at 1298 ... now the picture is all coming together ... not much time left!

 

Show me some charts and I will believe you ... LOL

Wed, 05/14/2014 - 15:50 | 4760180 Save_America1st
Save_America1st's picture

Hard to tell what this will mean until we hear some speculating conversations from the experts.  I'd like to hear what Eric Sprott, Rick Rule, Max Keiser, Alisdair Macleod, Jim Willie, James Turk, Rantying Andy Hoffman, etc. etc. and the rest of the usual crew will have to say about this in the coming weeks ahead. 

But I don't put anything past the criminal Evil Empire.  I just can't see them giving this up without having some other big-time screw-job plan in the works to fuck with all of us.

I can just see silver rising steadily until about September or October to 35 or 40 and then when they think they've got as many sheep as they can all going long they're going to drop the boom on everyone with some crazy shit that'll drive silver back down to 20 again and bloody up the streets with fleeced muppets everywhere.

I dunno...proceed with caution.  Main thing is to stay the fuck outta the paper games and just keep steadily stacking phyzz like nothing has happened.  Stay the course, cost average in and stack regularly, and in the long run we won't get hurt. 

The suckers in the paper game and unfortunately the non-stackers too will be the ones wishing they had phyzz in the years to come after the SHTF.

Only once the Crimex has finally exploded can the Ewoks and the rest of us party down on Endor like it's 1999.

Wed, 05/14/2014 - 16:16 | 4760350 Manthong
Manthong's picture

Gee, guess who has been using Fed and our  “money” to drive the paper silver price/fix into the dirt and guess who has been stacking like a maniac and will profit most from the run-up..

http://goldsilverworlds.com/physical-market/jp-morgan-holds-highest-amount-of-physical-silver-in-history/

They should all be in jail or guests of honor at a necktie party.

Wed, 05/14/2014 - 16:33 | 4760405 Save_America1st
Save_America1st's picture

Yup, exacto-mundo!!!  Actually, Turd has been all over this from a very long time ago.  Always great stuff over at TFMetalsReport.com

Wed, 05/14/2014 - 17:14 | 4760580 jimmytorpedo
jimmytorpedo's picture

Oh stop it with the music videos will you.

I'm already listening to Bob Marley.

Babylon System is the Vampire.

American pie,....sheesh!

Wed, 05/14/2014 - 13:29 | 4759675 TeamDepends
TeamDepends's picture

Well boys and girls, if this is legit we now have a drink-by date to get our houses in order.  Soaring PM prices crush the illusion of a sound dollar.  Expect fiscal false flags, prodigious propaganda, and unbridled usurpation of states rights between now and then.  Good luck to you all.  See you on the other side.

Wed, 05/14/2014 - 16:18 | 4760348 Manthong
Manthong's picture

.. don't forget the official social unrest

Wed, 05/14/2014 - 14:35 | 4759921 daveO
daveO's picture

Slowest time of year, so things don't blow up in their faces.

Wed, 05/14/2014 - 13:14 | 4759597 SWRichmond
SWRichmond's picture

+ 1.  this is just another indicator of the West's declining power.

Economic power moving east...western financial institutions becoming irrelevant.  

War is in the on deck circle.  And not a pansy-ass regional war, either.  China seems willing to let Putin lead the overt resistance.  this is typical Chinese perceived self image and role in the world.  let others do the fighting.  

Wed, 05/14/2014 - 10:33 | 4758847 kliguy38
kliguy38's picture

correct..... Plan"B" will be next for the boyz......don't worry.....they already have it ready

Wed, 05/14/2014 - 10:40 | 4758881 Pinto Currency
Pinto Currency's picture

JSB

15:1 is coming.

Silver seems to be the Achille's heel of the paper precious metals market.

It's over and the LBMA knows it.

Wed, 05/14/2014 - 10:55 | 4758960 outamyeffinway
outamyeffinway's picture

The current amount of silver coming out of the ground compared to gold would put the ratio around 8-9:1.

Wed, 05/14/2014 - 11:35 | 4759143 tmosley
tmosley's picture

The current ratio of above ground supply would be even lower than that.

Then there is the blow off top to consider when the public goes nuts trying to get in on the price explosion.

Planning to trade my silver for gold mostly above 1:1.

Wed, 05/14/2014 - 15:47 | 4760261 Save_America1st
Save_America1st's picture

the silver gold swap ratio is what I've been constantly thinking about.  I'm 99% silver and plan on being that way until the GSR/SGR (whatever) comes back down to Earth.  But what I'm concerned with is will there be any gold to swap for the next time the ratio gets down towards 30:1, 20:1, 15:1, or lower?

Maybe "price-wise" the ratio will be at those levels, but will anybody trade their gold for silver at that point without adding a hefty "trade premium" over many more ounces of silver to sweeten the deal.

Why will anyone want silver for gold once the ratio starts getting that low?  Will it be because they think there's still a lot more higher prices from whatever it's at from that point going forward and so they want to gain more silver?

Will they trade because they just don't want gold anymore at that point? 

I just wonder if I shouldn't wait that long if/when those ratios ever happen.  I'm thinking I might start trading for gold just a little bit like cost-averaging in once we hit the low 50's to 1 ratio.  Then see if it goes a little lower and then try to swap for another ounce or two of gold.  Then wait and see if it goes lower and then try to swap again for another few ounces, etc. etc.

I'd like to eventually even things out and be closer to 50/50 silver to gold at some point.  But I'm just concerned as to whether America will have much gold left to swap for which will then blow the ratio apart and spread it wider again as more people will have stocked up on silver now than gold which will cause an imbalance in the phyzz ratio within America's borders. 

I'm also a bit concerned that the Evil Empire will one day let gold scream higher but at the same time they will "cap" silver at like 50 bucks by stating some kind of national security emergency given that silver is used industrially, medically, etc. 

That would seriously screw over those of us currently maxed out with all silver and very little gold.  We would never see silver's real valuation potential and be stuck at a certain level while gold goes off the charts.  We'd be forced to trade all our silver for just a little bit of gold and we'd be totally screwed. 

That's another reason why I'm thinking of swapping earlier at higher ratios just in case something fucked up like this gets pulled on us.  That way I'll at least have more gold ounces than if I tried to wait for ratios down under 30:1, 20:1, etc.

Any thoughts on this?  Am I not thinking the right way about this?  It's been bugging the hell outta me lately.

Wed, 05/14/2014 - 15:57 | 4760301 tmosley
tmosley's picture

You absolutely MUST cost average out of your position, or you will almost certainly miss the whole move either by being too early or too late.

And yes, there will be gold for those who have silver.  The silver will be in great demand by the industrial users and the bubble chasers during the blow off top.  Not everyone will be making the silver->gold trade, so I think those who will will find ample gold for their silver.  Most silver owners think silver is an end in and of itself, rather than recognizing that gold is the best money they could own, and that everything, including silver should be denominated in that, and nothing else.

Wed, 05/14/2014 - 17:18 | 4760600 jimmytorpedo
jimmytorpedo's picture

When I run out of tire weights I'm turning my silver into lead.

Babylon System is the Vampire.

Wed, 05/14/2014 - 18:42 | 4760880 Save_America1st
Save_America1st's picture

@tmosley  (aren't you a Turdite like me?) :)

When you say I must cost average out of my position...just want to see if I understand you.  Are you saying that my hunch is right and my plan to swap out some Ag for gold the way I said above would be the way to go so that I can get myself to around a 50/50 holding? 

Wed, 05/14/2014 - 12:41 | 4759476 Citxmech
Citxmech's picture

Just listened to a pretty good interview with Sprott on King World News and he called it at 11:1.  Regardless - lots of headroom to explore in silver.

Thu, 05/15/2014 - 06:59 | 4761866 zilver
zilver's picture

I red an article about de gold / silver ratio sales is at 1/37 (total in 2013). They compared the sales of the most popular silver and gold coins. So Maple Leaf Gold vs silver Eagle. http://thebullionhouse.nl/zilver-prijs/verkoop-zilveren-eagles-mei-zeer-sterk-silver-fixing-london-exit/ 

 

Wed, 05/14/2014 - 10:50 | 4758942 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yes and when these ratio pegs are enforced then you only need to fix one of the two to rig both when it comes to pricing. Price and value are not one and the same. I consider silver a lot more valuable overall than gold. Each has it's pluses and minuses but silver is a more versatile metal overall when you factor in non monetary considerations.

Wed, 05/14/2014 - 13:58 | 4759790 Carpenter1
Carpenter1's picture

It's over when the top management of every TBTF is hanging from lamposts in every city in North America and Europe

Wed, 05/14/2014 - 14:44 | 4759949 Antifaschistische
Antifaschistische's picture

Understanding market mechanisms is not what I do for a living.   However, I've been a fan of collecting metals every since my father took me to the Coin Shop with my first Paper Route profit.

As much as I like dreaming of $200 silver and $5k gold....why does "fixing" or "manipulation" (which I strongly believe in) mean the natural price should be MUCH higher?

If someone said the Hedge Funds were manipulating the price of Apple (which I believe they do) wouldn't they be manipulating it higher?

Why does metal manipulation/fixing mean the otherwise natural equilibrium price should be significantly higher than today's "market" price?

I'm not suggesting I think the price will drop.  I have no clue...like I said, I don't understand all these mechanisms....but I don't automatically assume manipulation equals market price depression.

Wed, 05/14/2014 - 17:09 | 4760566 Al Gorerhythm
Al Gorerhythm's picture

Why? Think derivitives. There will be BIGtime losers who are tied to those things; the guys on the other side of the physical obligations they purport to be able to deliver.

Wed, 05/14/2014 - 10:31 | 4758836 Pinto Currency
Pinto Currency's picture

-

Wed, 05/14/2014 - 10:31 | 4758841 BaBaBouy
BaBaBouy's picture

WELCOME The NEW SILVER Fix................ Mr. HFT...

Wed, 05/14/2014 - 10:38 | 4758827 BaBaBouy
BaBaBouy's picture

.

Wed, 05/14/2014 - 12:49 | 4759516 americanspirit
americanspirit's picture

And Tao 4, let's not forget "I was just fixin' to do that."

Wed, 05/14/2014 - 10:41 | 4758889 Greenskeeper_Carl
Greenskeeper_Carl's picture

They already have it. None of what this article says mentions dumping millions of ounces worth of silver futures contracts during thin trading times, forcing the price down. I like the sentiment, but I don't foresee this making that much of a difference.

Wed, 05/14/2014 - 14:40 | 4759935 daveO
daveO's picture

Right. Heavy shorting around 8/14. Bottom about 2 wks. later, on Labor Day. 

Wed, 05/14/2014 - 16:43 | 4760453 JLee2027
JLee2027's picture

You can be certain that the banksters already have another means for fucking us. 

I agree. It's only a cosmetic change for the appearance of removing the rigging.

Wed, 05/14/2014 - 13:26 | 4759658 hedgelessWhoresMan
hedgelessWhoresMan's picture

MDB doesn't give a $hit about the truth.

Wed, 05/14/2014 - 10:08 | 4758727 MillionDollarBonus_
MillionDollarBonus_'s picture

See? There's always a reason why silverbugz' ghastly trading performance is someone else's fault. No how much the regulators attempt to satisfy every whim of the paranoid silverbugz, there is always 'manipulation' unless the market is going in their preferred direction.

Wed, 05/14/2014 - 10:11 | 4758742 Bay of Pigs
Bay of Pigs's picture

lmao...

Thanks Tyler. LOVE this sock puppet.


Wed, 05/14/2014 - 10:24 | 4758811 cifo
cifo's picture

"silverbugz' ghastly trading performance"

speak for yourself

 

Wed, 05/14/2014 - 15:34 | 4760189 dryam
dryam's picture

The timing of when MDB shows up on ZH is a curious thing. It seems to be related to the stories hitting too close to the entire monetary sham. MBD, your attempts at taking ZH readers eyes off the ball & misdirecting the forum discussions is humorous. Who pays your salary anyway, the fed, the treasury, one of the TBTF's?

Wed, 05/14/2014 - 10:47 | 4758925 JonNadler
JonNadler's picture

When silver goes to 100, MDB will still be here I am sure....with a different name of course but he will still be here

Wed, 05/14/2014 - 10:57 | 4758977 geminiRX
geminiRX's picture

MDB is likely Martin Armstrong, sure talks like him

Wed, 05/14/2014 - 11:14 | 4759031 earnyermoney
earnyermoney's picture

likely Paul Krugman. Clever handle for the Nobel Prize winner. I believe he received an MDB that year.

Wed, 05/14/2014 - 16:17 | 4760356 MillionDollarBoner_
MillionDollarBoner_'s picture

Hey..!..Don't diss my bro!...Jus' 'cos he retarded...

Wed, 05/14/2014 - 12:45 | 4759498 Jonas Parker
Jonas Parker's picture

"When silver goes to 100, MDB will still be here I am sure....with a different name of course but he will still be here."

 

Yup, look for "Ten Cent Bonus" and his first post - "Brother can you spare a dime."

Wed, 05/14/2014 - 10:13 | 4758753 beegle
beegle's picture

MDB, if the prices of gold and silver keep falling, a few mines will probably close for being unprofitable. The supply will fall too, and the market will take care of the rest.

Wed, 05/14/2014 - 10:25 | 4758815 cifo
cifo's picture

Am I hearing my echo?

Wed, 05/14/2014 - 13:23 | 4759646 SoilMyselfRotten
SoilMyselfRotten's picture

I'm hearing plagiarism

Wed, 05/14/2014 - 13:32 | 4759679 Solon the Destroyer
Solon the Destroyer's picture

Cifo and Beegle...

Gold mining accounts for about a 1.2% increase in the stocks of Gold annually. It is largely irrelevant.  It is because Gold has such a massive stocks to flows ratio and is physically constrained on that basis (unlike the USD) that make Gold a great choice for money.  Mining has very little effect on the exchange rate between USD and Gold.

Wed, 05/14/2014 - 13:51 | 4759755 cifo
cifo's picture

So you are essentially saying that if all gold mining would stop, the consequences for the price of gold would be minimal.

Wed, 05/14/2014 - 14:13 | 4759845 SWCroaker
SWCroaker's picture

Obi Wan: "These are not the droids you're looking for."

Storm Trooper: "These aren't the droids we're looking for."

Obi Wan: "We can go."

Storm Trooper: "You can go."

 

Luke: "Wow, how did you do that?"

Obi Wan: "The Force has power over weak minds."

Luke: The Force has power over weak minds.       <-- Mad Magazine joke version of the exchange, but you get the point.

Wed, 05/14/2014 - 16:08 | 4760251 Solon the Destroyer
Solon the Destroyer's picture

 

So you are essentially saying that if all gold mining would stop, the consequences for the price of gold would be minimal.

I think you get it, but I am going to re-state just in case.

What I am essentially saying, and this is well-known and non-controversial, is that present mining has very little effect on the fiat price of gold.  Not no effect, but it is dwarfed by other factors. 

If mining did have a large effect on the fiat price, Gold would make a very poor choice for money.  Copper, for eg, has a very low stocks to flows ratio (outside of Chinese warehouses), and thus an interruption of mining would have a massive effect on the fiat price for copper, since copper is continuously consumed by the economy. This particular property of copper--its volatility with respect to supply--makes it a poor choice for money. Gold does not exhibit the same sensitivity.

Wed, 05/14/2014 - 10:26 | 4758814 LawsofPhysics
LawsofPhysics's picture

The dollar cost average on my silver holdings is less than $4 an ounce. 

Tell me MDB, what has the price of silver and gold done over the last 5, 10, 20, 30, or 40 years?

I guess anyone's interest in wealth preservation depends on how long they expect to live or how long they think their children will live.

MDB has no interest in such things, but we still appreciate his sarcasm (when it's good anyway).

Wed, 05/14/2014 - 17:29 | 4760644 JonNadler
JonNadler's picture

you mean you didn't buy it all at 48? Because that's what's needed for MDB's argument to work

Wed, 05/14/2014 - 12:53 | 4759536 Puncher75
Puncher75's picture

Oh, is THAT what they're doing?  "Attempting to satisfy every whim of the paranoid silverbugz"?  Do tell.

Wed, 05/14/2014 - 14:23 | 4759885 vulcanraven
vulcanraven's picture

lol "trading"

Wed, 05/14/2014 - 18:50 | 4760914 fattail
fattail's picture

Who trades silver????   I thought you just keep stacking it higher.

Wed, 05/14/2014 - 14:26 | 4759891 GOSPLAN HERO
GOSPLAN HERO's picture

Jesus Drives the Money Changers From the Temple - Story Summary:

Jesus Christ and his disciples journeyed to Jerusalem to celebrate the feast of Passover. They found the sacred city of God overflowing with thousands of pilgrims from all parts of the world.

Entering the Temple, Jesus saw the money changers, along with merchants who were selling animals for sacrifice. Pilgrims carried coins from their home towns, most bearing the images of Roman emperors or Greek gods, which Temple authorities considered idolatrous.

The high priest ordered that only Tyrian shekels would be accepted for the annual half-shekel Temple tax because they contained a higher percentage of silver, so the money changers exchanged unacceptable coins for these shekels. Of course, they extracted a profit, sometimes much more than the law allowed.

Jesus was so filled with anger at the desecration of the holy place that he took some cords and wove them into a small whip. He ran about, knocking over the tables of the money changers, spilling coins on the ground. He drove the exchangers out of the area, along with the men selling pigeons and cattle. He also prevented people from using the court as a shortcut.

As he cleansed the Temple of greed and profit, Jesus quoted from Isaiah 56:7: "My house shall be called a house of prayer, but you make it a den of robbers." (Matthew 21:13)

Wed, 05/14/2014 - 14:45 | 4759951 daveO
daveO's picture

And they (you know who) have been out to remove him from the public conscience ever since!

Wed, 05/14/2014 - 10:03 | 4758691 firstdivision
firstdivision's picture

Until a court of law finds that settle on delivery means that the metal has to be delivered, and not just settled financially, the price will remain low. 

Wed, 05/14/2014 - 10:05 | 4758705 Dr. Richard Head
Dr. Richard Head's picture

Court of law?  What is this you speak of?  I only see kangaroo courts that prosecute and jail non-violent speeders and people that continue to drive without the permission of the state. 

Wed, 05/14/2014 - 10:15 | 4758761 gmrpeabody
gmrpeabody's picture

Right you are, Doctor..., may we call you Dick?

Wed, 05/14/2014 - 12:06 | 4759295 Four chan
Four chan's picture

court di rothschild.

Wed, 05/14/2014 - 13:26 | 4759654 SoilMyselfRotten
SoilMyselfRotten's picture

It's the same court they use to decide who the terrurists are

Wed, 05/14/2014 - 10:03 | 4758697 Dr. Richard Head
Dr. Richard Head's picture

Ha.  Any silver or gold post brings you out of the shadows.  By the way, none of us want to be kings.  We simply want to be able to have some form of savings for our extra capital and not some digital representation of our productivity.  I guess that is too much to ask for paper bugs such as yourself.

Wed, 05/14/2014 - 10:04 | 4758702 Peter Pan
Peter Pan's picture

Your what if questions totally ignore the history of gold and fiat money.

Unless you can somehow reconcile your statement with the reality of history, your statement unfortunately betrays an ignorance and nothing less.

Wed, 05/14/2014 - 10:05 | 4758708 Oh regional Indian
Oh regional Indian's picture

Sorry MDB, very few have King dreams. More are hoping to first survive then thrive.

So it seems that we will begin to see these Silver market rumbles as soon as late June Early July!

Remember $50? T'will be history this time. So many factors, including the ever increasing pace of dollar decline.

For a very unique/esoteric  look at Silver and Gold...

http://aadivaahan.wordpress.com/2012/01/22/au-kicks-a-joke-more-deep-sym...

Wed, 05/14/2014 - 10:12 | 4758751 Winston Churchill
Winston Churchill's picture

Come on MDB, you already admitted you were a stacker(drunk maybe at the time).
Is this post for the ZH fresh meat ?
Trying to get some more cheap PM's while you can, you old
fuzzball hypocrite you.

Wed, 05/14/2014 - 10:21 | 4758794 LawsofPhysics
LawsofPhysics's picture

An ounce is an ounce is an ounce...

 

What has the price of gold in fiat done over the last 5, 10, 20, or 30 years? 

I guess it all depends how long you think you or your children will live.

Wed, 05/14/2014 - 10:43 | 4758893 nottfar
nottfar's picture

Signed in just to welcome you back MDB.

Wed, 05/14/2014 - 10:56 | 4758975 Meat Hammer
Meat Hammer's picture

I wonder how big MDB's stack is.

Wed, 05/14/2014 - 11:00 | 4758987 Winston Churchill
Winston Churchill's picture

Not big enough, obviously.

Wed, 05/14/2014 - 11:11 | 4759017 Dr. Engali
Dr. Engali's picture

Getting a little personal there aren't you meat?  ;->

Wed, 05/14/2014 - 11:12 | 4759005 BrosephStiglitz
BrosephStiglitz's picture

Physical PMs are one of the few things I would consider buying to hold right now as a hedge against macro risk.  Unlike most I haven't been on the PM rollercoaster the last two years.  I bought back into the market in Dec '13.

Anyone who thinks PMs are going down in value long-term is a lunatic. Short to medium they might drop based on deflation, depending on the region of the world that you are in.  Long-term the economy is heading full tilt for a wall.  The only question anyone should be asking themselves with regard to PMs is whether the opportunity cost of holding in the near-term outweighs the potential downside risks. 

Do you really believe silver will ever see the 1990s lows without a issuance of a new, trusted currency?  Really?  If you do then you must be on a different planet from me.  All I see is debt accumulation and an inability of policy makers to face impending problems.

Wed, 05/14/2014 - 13:39 | 4759704 Solon the Destroyer
Solon the Destroyer's picture

Why would they drop due to deflation?  Seems like historically they do the opposite. Deflation usually comes with political uncertainty and a printer mentality.  Gold can do quite well in fiat terms during deflation.

Wed, 05/14/2014 - 19:04 | 4760963 BrosephStiglitz
BrosephStiglitz's picture

A prolonged period of deflation (like the recent Japanese experience) would see the big market players becoming as liquid and cash-fat as possible.

If faced with a serious long-term deflationary prospect:
- Clear debt.
- Liquidate assets.

- Some really top-notch stocks might outperform, but they will be the exception rather than the norm.
- T-bills might be a good place to be.

Note: This would be in an isolated and prolonged period of deflation.  I have some serious doubts as to whether the developed nations could simultaneously manage a prolonged deflationary period though they will probably try with the inextinguishable debt-serfdom that they are imposing on the younger generations, which leads me to the next point:

If the global economy is likely to be the proverbial fan that the shit hits and civil instability goes through the roof all over the world, PMs will probably trade at premium after the basic human necessities (food, water, shelter, energy, medicine etc.)  In the event of a currency crisis they would preserve purchasing power until later and are far more readily liquidated than a house, or many other real assets.

Wed, 05/14/2014 - 14:56 | 4759991 daveO
daveO's picture

1990's lows would require around 3/4th's of debt to be extinguished. Slave owners won't allow that!  

Wed, 05/14/2014 - 11:09 | 4759011 Bangin7GramRocks
Bangin7GramRocks's picture

"Kings of the apocalypse" I like that. Prices won't go up because it is too fucking easy to fix. Someone else will step right in. 25 year old jit bag junior traders move more money than the entire silver market in a week.

Wed, 05/14/2014 - 11:15 | 4759030 Bill of Rights
Bill of Rights's picture

You must be the slow one in the family....shorty.

Wed, 05/14/2014 - 11:15 | 4759038 jepicza
jepicza's picture

If you like your fix, you can keep your fix.

Wed, 05/14/2014 - 11:42 | 4759184 J_jade
J_jade's picture

you are correct.  Anyone who thinks that gold will go to 5,000 or even 20,000 is a total fool who does not understand economics and is being played and manipulated by the ppl who are stealing there money on line. 

Gold will go back down to 300-200 dollars watch and learn childeren and communists.

Wed, 05/14/2014 - 12:22 | 4759378 Dr. Everett V. Scott
Dr. Everett V. Scott's picture

J_jade,

If gold goes under $1000, I will be stacking with both hands.

Calculate what a dollar will be worth in fifteen years, with only 6% inflation [which Shadow Statistics says is actual current inflation]. If you believe that gold will go to $200-$300 an ounce, you must be in an extremely blissful state of mind.

Inflation has been very low. It may go lower if deflation occurrs.  But with the Fed printing 85 BILLION dollars a MONTH, sooner or later the chickens will come home to roost. Is there any doubt?

Wed, 05/14/2014 - 15:03 | 4760017 daveO
daveO's picture

That'd require 80% of the national debt to disappear. It's worth around $1500/oz with the current debt level(which only goes up). They could, of course, 'fix' the price there and it will all disappear from the market, just like silver coins did in 1965. i only started buying in April 2013, when the bankers started acting out of desperation and the Chinese jumped all over that desperation. If the market drives the price that low, then banks will be turned into homeless shelters. Good luck getting you deposits back.

Wed, 05/14/2014 - 15:44 | 4760245 SAT 800
SAT 800's picture

LOL. That'll be great; with a $300 dollar oz. I'll be able to buy a new Ford Pick Up truck for 1200$. Your grasp on the situation is not too tight, I'm afraid.

Wed, 05/14/2014 - 12:37 | 4759451 Jonas Parker
Jonas Parker's picture

"But what if the prices of gold and silver keep falling despite this change? Will silverbugz and goldbugz admit that they were wrong? I doubt it, because that would require them to come to terms with their own incompetence and give up their dreams of becoming kings of the apocalypse."

 

If the prices keep falling, then I can buy more... 

Wed, 05/14/2014 - 13:35 | 4759694 dizzyfingers
dizzyfingers's picture

"If the prices keep falling, then I can buy more... "

..AND AMORTIZE!!!!!!!!!!!!!!

Wed, 05/14/2014 - 12:45 | 4759481 Canadian Dirtlump
Canadian Dirtlump's picture

dillion dollar bone ass,

 

It looks like from an american silver eagle standpoint, all the people who have been wrong are busy averaging down. The mint played games with supply in January to forcibly make it look like demand had collapsed.

 

Fast forward to May and now as of today's update there have been 20,710,000 sold this compares to 21,768,000 for the same period last year including ALL of may.

 

Keep in mind again that jan 2013 saw sales of 7.5 million vs an artificially stunted 4.75 million for 2014. Maple sales were up 50% last year and should be on fire again since the maples have a new anti counterfeit design.

 

Sum total? We're wrong until we're not wrong and you don't have to be a sage to see this market is a mirage inserted into a casino covered in a thin veneer of bullshit.

 

If it weren't for them over mining the likes of copper and zinc ( see above ground stocks exploding ) there wouldn't be any silver around without a price explosion then those mines would sudden;y become silver mines.

Wed, 05/14/2014 - 13:10 | 4759588 realWhiteNight123129
realWhiteNight123129's picture

MillionDollarBonus.

 

Commercial bank currency is created against either money M0-Federal Notes or credit (you have a receivable and you want to have the good bill discounted). So you deposit Federal notes and get a currency deposit, or you sell your receivables and get a currency deposit.

In the old days money was the Gold coin.

In fiat a bizarre situation occurs, money (M0) is created against credit as well. So commercial bank currency is a bit better because the bad credit (MBS and TSYs) has been swapped for base money. But M0 is NOW backed by crap (TSY and MBS).

So in aggregate, bank currency and M0 (which are both called dollars while they are not technically fully fungible historically and in practice as well -- see Cyprus-- bank currency deposit failed); ARE ONLY AS GOOD AS THE ASSETS BACKING THEM.

Since the assets backing them are crap, it must be crap right? Well not so because there is an extremely good credit asset backing the USD, which are the world trade (Reserve Currency). 

If the other countries stop using the USD abruptly, game over for the USD. It is unlikely unless the US foreign policy does something stupid. However those policy makers are good at that. 

Conversely a decline in the use of hte US dollar abroad will make price of basic necessities rise but not so much salaries, which could theorically help a bit terms of trade. However printing hurts terms of trade. If the foreign countries would decide to use less USD while the US would not print much, it would be very good... 

I hope this dinstinction between money and bank currency is helpful to you. Show good credit and I do not care if there si a backing with Gold (that was the case of the scottish paper currency, only backed by credit -- not much gold--, but practically containing only good bills in the credit backing the paper currency).

Wed, 05/14/2014 - 13:19 | 4759630 SilverRhino
SilverRhino's picture

Listen dildonose, we aren't buying silver to trade a quick buck.  We're buying silver as a LONG term investment.   

Silver: the retirement metal.

Wed, 05/14/2014 - 13:33 | 4759687 Bernoulli
Bernoulli's picture

If the prices keep falling, I'll continue to be "incompetent" and buy more physical.

I'm not dreaming of anything, I just like the stuff.

And you, MDB, have fun with your paper. Bye bye now.

Wed, 05/14/2014 - 15:13 | 4760070 SAT 800
SAT 800's picture

No they're now Cult Members; nothing in reality will be allowed to interfere with their alternate reality. The idea that the London price fixing, (so called, and only provocative to the severely ignorant), was any part of any sort of manipulation is too funny for words. Here's the question nothing of the little muppets can answer. If you want the price of Silver to be lower you have to call up China and Switzerland and tell them not to buy any. Who's going to do that? Who ever did that ? No one of course. It's too ridiculous for words. Just as real as global warming; and an important topic for the same reason; ignorance.

Wed, 05/14/2014 - 15:41 | 4760227 SAT 800
SAT 800's picture

No, you're right; like Cult Members of all types they will never alllow reality to pollute their beautiful delusion.

Wed, 05/14/2014 - 10:34 | 4758852 Lewshine
Lewshine's picture

The best indicator for "free range" metals won't be the issues of this article. Give me a break! ...Some group in London SAYS; "Yeah...We will no longer set the price of Silver!!" Hurry buy!!!

Just watch the Dow. When you see the Dow drop 600 to a 1000 points in a day - You'll know you are probably too late to buy Silver.

Currently, the Dow is in super fraud mode. Trying to create short money positions to crush by days end...While metals are a great short.

Wed, 05/14/2014 - 11:45 | 4759203 Son of Captain Nemo
Son of Captain Nemo's picture

"Currently, the Dow is in super fraud mode. Trying to create short money positions to crush by days end...While metals are a great short."...

Truth be told you can only play the bluff so long before it wears thin.  This is a very important day and announcement on many levels.

If they were thinking the head fake will continue to work with cover like this they may have played one hand too many...

My guess is that even with JPM's 50 million ounce of phyz it will get interesting if this bluff starts to move south between now and August.  What do they say if the "over-the-counter crowd" or what is left of it says time to cut our losses and buy physical coupled with the out of control SLV purchases we're already witnessing out of India, China and Eastern Europe?  Do they retract their statement and say nah... we changed our minds? -we're staying in this after all???...

Fine line between sanity and insanity when you've lost as much as these guys already have!

 

 

Wed, 05/14/2014 - 10:39 | 4758878 BailoutBandit
BailoutBandit's picture

Unfortunately, it doesn't take a fix to fix a market when you have unlimited 1's and 0's. I call too good to be true.

Wed, 05/14/2014 - 12:15 | 4759346 Zadok
Zadok's picture

Every time I see something that might bring some minor degree of honesty to price discovery, I am disappointed. It will happen but it's likely to be shockingly painful and therefore still disappointing.

I'm just weary of waiting.

Wed, 05/14/2014 - 12:23 | 4759385 drendebe10
drendebe10's picture

Hi Yo, Ag....  Away!!!

Wed, 05/14/2014 - 13:09 | 4759590 vzhyk
vzhyk's picture

Designate Russia as "State Sponsor of Terrorism"

https://petitions.whitehouse.gov/petition/designate-russia-state-sponsor...

Wed, 05/14/2014 - 16:22 | 4760373 endfedup
endfedup's picture

sorry to thread jack but a buddy of mine who i convinced to buy a monster box last year from Monex got a call from them this morning, my buddy tells me that they want him to send them (monex) his eagles back so they (monex) can store them for him. Monex guy tell him that for every 2 eagles stored (in there new vault) they will give him 1 extra. Buddy tells him he is busy and to email him the info. (see below). Anyone else get that call? If anyone has time call them as I only stack im not a financial guy but Monex sounds fucking desperate me.

Cheers

 

From:  <info@monex.com>
Date: May 14, 2014
Subject: Monex Atlas Account Brochure
To: <>
Cc:

Dear Investor:

I'm very pleased to send you (via the link below) our latest brochure on the Monex Atlas Insured Bullion Storage Account, a powerful and secure way to own gold, silver and other precious metals.

>>> Click here for access to your complimentary brochure:  http://www.monex.com/atlas-brochure.pdf

Once you have had a chance to read through our Atlas brochure, I invite you to give me a call to discuss the many benefits both Monex and I can offer you, including our latest charts, research reports and more.

Please give me a call at your earliest convenience.

Thank you!

Wed, 05/14/2014 - 10:02 | 4758666 Quinvarius
Quinvarius's picture

The daily ritual of bankers cooperatively dumping their client possessions on the market all at once, so they can make money with derivative side bets, has been hampered by the lack of client assets remaining to dump.

Wed, 05/14/2014 - 10:06 | 4758710 gafgroocK
gafgroocK's picture

 

 

So does this mean the KITCO Chart means nothing *now* or means nothing *then*?

Wed, 05/14/2014 - 10:18 | 4758781 Quinvarius
Quinvarius's picture

It means that it is really easy to steal and sell other people's stuff at half price.

Wed, 05/14/2014 - 11:42 | 4759187 Overfed
Overfed's picture

Ain't stealin' my silver. I know exactly where it is, and can guard it.

Wed, 05/14/2014 - 13:09 | 4759591 vzhyk
vzhyk's picture

Designate Russia as "State Sponsor of Terrorism" https://petitions.whitehouse.gov/petition/designate-russia-state-sponsor...

Wed, 05/14/2014 - 10:08 | 4758672 Sudden Debt
Sudden Debt's picture

What happens after 14 August 2014 for market participants with contracts referencing the Silver Fix?

The Company is not in a position to comment on such matters,

 

 

In short: You're fucked.

Start liquidating now as in: GET PISSED DRUNK!

Wed, 05/14/2014 - 11:22 | 4759073 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Yeah, this could cause a waterfall in silver in the short term couldn't it?

 

I always think of the FOFOA argument that since the official price of precious metals is set in paper markets, the collapse of those markets must take the official prices to near $0 before a period of the price being unknown and then finally, we start hearing about a new price set in cash and carry markets.

 

 

Wed, 05/14/2014 - 10:01 | 4758674 JenkinsLane
JenkinsLane's picture

John Dizard is a shill cunt - don't take it badly John, you have lots of company.

Wed, 05/14/2014 - 10:00 | 4758676 fonzannoon
fonzannoon's picture

why do I have a feeling this will not end up with silver skyrocketing and more likely with the same shit price and a group of people saying "see, we told you there was no manipulation"

Wed, 05/14/2014 - 10:01 | 4758684 JenkinsLane
JenkinsLane's picture

Meet the new boss...

Wed, 05/14/2014 - 10:07 | 4758714 Quinvarius
Quinvarius's picture

If it was possible to continue they would.  I think the real fact of this market is that it requires physical metal to manipulate it.  It can come from anywhere and they were stealing it from everywhere.  But they can't find any more and they owe a lot to other people. 

Wed, 05/14/2014 - 10:21 | 4758796 Winston Churchill
Winston Churchill's picture

Shanghai free trade zone starts future trading in July with
full convertibility of yuan within the zone.
No naked shorting.They are just capitulating before the
inevitable.

Wed, 05/14/2014 - 11:01 | 4758993 Raging Debate
Raging Debate's picture

Quinvarius - I agree with both your comments. I don't think silver will take off after August. With Yuan becoming reserve currency coincides new global security arrangements. Very few investors get this they think the USA lost the peg to China. That means many in governnent dont get it either. This poses geopolitical risks of war to investors. The prices will rise in my opinion based on a transitional period for a few years.

I saw a commentator speculate that Yuan will be two to one dollar. I wish I could remember his screen name. Dollar falls between .50-.60 that will be inflationary and inside leadership has been talking about killing the dollar for years which is in effect revealing in currency terms how much America has been hollowed out. That metal will certainly come in handy over the next several years.

I remember gold's value is best represented as purchasing a decent suit in Hong Kong. What does a decent suit go for these days over there? Between $1,500-$2,000. So it room to rise on it's own without geopolitical risks going forward. I certainly am not one that subscribes to reasoning as to why gold will do a moonshot to $10,000.

Wed, 05/14/2014 - 11:19 | 4759057 johny2
johny2's picture

It will be rather usd collapsing to 0.0000001 of oz au, roughly put. and the suits are good for occasions, for measuring amount of au available, less so. cheers!

Wed, 05/14/2014 - 10:07 | 4758717 joak
joak's picture

Because there will still be naked shorts on futures !

Wed, 05/14/2014 - 10:12 | 4758746 Sean7k
Sean7k's picture

Reading the history of the protracted war by bankers to install fractional reserve banking and eliminate specie tells me one thing: they will never allow specie to circulate as money. There will always be a mechanism or outright outlawing to maintain specie as a barbarous relic. Bankers cannot cheat value and steal wealth with specie. Leverage is minimized. State spending is diminished. 

So, unless people decide to take legal tender in their own hands and do the heavy lifting of bypassing banks in as many transactions as possible, this is just another red herring. No one willingly releases a slave.

Wed, 05/14/2014 - 10:16 | 4758773 agstacks
agstacks's picture

abso-fucking-lutely.  Nothing will change..

Wed, 05/14/2014 - 10:49 | 4758935 KickIce
KickIce's picture

"The field may be more level, but there are not enough players left for a game." Mocking those who prefer unmanipulated markets, he said:

... once that satisfying self-righteous feeling passes, the dwellers on BaFin Island might want to consider whether they have helped create a level playing field without enough players for the game. So far, it would appear the significant beneficiaries of BaFin’s persuasion have been the less-than-systemically important dealers in international silver markets. While there will still be four participants in the London gold fix, the similarly structured 12pm London silver fix will now have only two participants, which common sense tells us means no real market at all.

 

Possibly another Hunt brothers move is upcoming or more likely it's already a done deal?  Or maybe that is how long they think they can keep the dollar afloat?  Who knows.

 

Wed, 05/14/2014 - 10:56 | 4758972 flyingcaveman
flyingcaveman's picture

Sounds like they've committed to keeping the price under control for the next few months until..... price gets pegged because of 'speculators', 'national security', or 'terrorism' maybe all of the above.  If they can't control the market, they'll be no market.  You get to keep your ball, but they'll roll up the playing field and go home.

Wed, 05/14/2014 - 16:33 | 4760408 agstacks
agstacks's picture

great comment +1

Wed, 05/14/2014 - 16:34 | 4760409 agstacks
agstacks's picture

great comment +1

Tue, 05/20/2014 - 20:28 | 4779426 MeelionDollerBogus
MeelionDollerBogus's picture

You got leveraged paper that needs a higher paper price to do good for you?

I have some but I also have physical. That physical never needs to go up in fiat price. Lower the better, lets you get more atoms & that lets you get other atoms later in this crazy thing we call barter.

Wed, 05/14/2014 - 10:01 | 4758681 Bay of Pigs
Bay of Pigs's picture

It just gets more bizarre by the day...

Wed, 05/14/2014 - 10:17 | 4758683 Dr. Engali
Dr. Engali's picture

Don't expect much out of this. As long as PMs are priced in paper terms where there can be unlimited contracts for the same lot of silver or gold, there will always be price manipulation. It's all too easy to conjure up some contracts and dump them into an illiquid market in order to knock down any upward momentum PMs may have. Does anybody really believe that the crazy Keynesians in power wants the true price of PMs discovered?

Wed, 05/14/2014 - 10:23 | 4758802 ParkAveFlasher
ParkAveFlasher's picture

I think the Crazies don't even believe that there is any truth but their own.  They don't believe there is any additional "discovery" to be made, besides what they choose to dictate via their elaborate machinations.

Wed, 05/14/2014 - 10:37 | 4758868 Sean7k
Sean7k's picture

I think the whole concept of "price" could end up traumatizing people. People have become accustomed to ridiculous price numbers. Real prices could be such a shock, they would stumble around in disbelief. They have tied values to a number and if the number were to change to reflect the quanity of specie available or deflation of the numbers to eliminate the psychology of rising prices, they just might become paralyzed.

Like in all hyperinflationary economies, even if subdued in appearance by drawing out perceptions, the people eventually get exhausted and panic sets in. Most people have no idea what money "is". Creditors and debtors are heavily invested in these number values. 

They have essentially fucked up the system so badly, it survives only because of the terror its' exit would cause.

Wed, 05/14/2014 - 12:47 | 4759511 Herd Redirectio...
Herd Redirection Committee's picture

What did they call it in Weimar Germany?  The Zeroes disease?  (edit: Zero stroke)

Wed, 05/14/2014 - 11:30 | 4759125 Inbetween is pain
Inbetween is pain's picture

True, but what function has the fix served in the face of paper metal?

Wed, 05/14/2014 - 10:02 | 4758685 Peter Pan
Peter Pan's picture

As if the powers to be would allow the current system to lapse without another system already primed to continue the manipulation under a different guise.

Wed, 05/14/2014 - 10:03 | 4758693 The Abstraction...
The Abstraction of Justice's picture

They need the bullion for that, and the signs are that the bullion as run out. Nature abhors a fix in a vacuum.

Wed, 05/14/2014 - 10:06 | 4758716 Peter Pan
Peter Pan's picture

Perhaps you are right but then again the FED supposedly started tapering only for us to witness a mysterious buyer of US paper from somewhere in little Belgium.

Wed, 05/14/2014 - 10:42 | 4758902 LawsofPhysics
LawsofPhysics's picture

Unfortunately, bullion banks are very real and they require physical metal.  Watch the supply/trade lines, bullion or energy has always ultimately backed trade.  If we switch to backing trade with commodities or energy (oil) that will only make things worse.

Wed, 05/14/2014 - 10:50 | 4758939 BandGap
BandGap's picture

What if there is another angle to this? I mean, what if the banks, and the bankers, just want to get the hell out of Dodge? With all the scrutiny a "new" system will be under, is it possible that they would go right back into the game and not think people would be pissed?

Not knowing what is going to happen, it just might be possible that they let the horses run free. This is a dream, perhaps my dream, but a possibility nonetheless.

Tue, 05/20/2014 - 20:17 | 4779388 MeelionDollerBogus
MeelionDollerBogus's picture

hahhahhahaha

"scrutiny"

hahahahahahahahahaha

Wed, 05/14/2014 - 10:03 | 4758692 RaceToTheBottom
RaceToTheBottom's picture

Lets try the duct tape over here......

Wed, 05/14/2014 - 10:08 | 4758729 Kawaii Empress ...
Kawaii Empress Natalia Poklonskaya's picture

My dad always says I only need two things to fix anything, duct tape and a screwdriver (btw this is a blanket statement for people from the region of the world where we come from).

Wed, 05/14/2014 - 10:20 | 4758792 BlindMonkey
BlindMonkey's picture

Is this the one where you drink the screwdriver when the duct tape doesnt work?

Wed, 05/14/2014 - 10:21 | 4758793 BlindMonkey
BlindMonkey's picture

Is this the one where you drink the screwdriver when the duct tape doesnt work?

Wed, 05/14/2014 - 10:51 | 4758944 forwardho
forwardho's picture

In the region we come from the term is Afro-engineering.

Others use a less P/C term.

Do NOT follow this link or you will be banned from the site!