-- Posted 26 August, 2008 | | Discuss This Article - Comments:

These two silver prices were at loggerheads with each other.  Every time the ‘real’ silver price began to rise, a ‘paper’ silver price would show up in large quantities and scare some of the holders of real silver to dump and run. 

Silver miners and coin dealers with ‘real silver’ in inventory, instead of being organized, and using supply and demand to determine the price of silver, would look at a computer screen, check to see what ‘paper silver’ was doing and meekly accept that as the price at which to sell  silver.

The Silver Users of America (SUA), is the only ‘user cartel’ in existence.  (Cartels are usually comprised of suppliers – OPEC comes to mind).  For years the SUA and their willing accomplices have been able to spook the people who deal in ‘real silver’ into coughing up silver at low prices, simply by dumping ‘paper silver’ onto the markets.  While there are no manuals available detailing how they do this, we will have to make some assumptions based on observations regarding market action. 

Here is my assumption:  Assume that I am a member of the SUA, and it is in my interest to keep the price of silver as low as possible.  Along with my fellow SUA members, I go about engaging half a dozen large bullion banks that are active in the futures markets.  I mention to them that my fellow SUA members and I would like to cap a rally that has just driven silver to a new high.  Would it be possible, I ask them, as soon as we see that buying is drying up because of resistance at this new price, for you and your fellow bankers to start selling a large number of futures contracts and options using ‘paper silver’?

Let’s pick a time when there are not too many people active in the marketplace, and volume has slowed right down.  My fellow SUA members and I will do the same, and as soon as we create some momentum, the hedge funds will dump their ‘long’ contracts and join us, since they like to chase a trend.  Then, the small and large investors who have bought silver on margin will have to sell, and they will also become our helpmates.

By any chance, do any of you bankers have an inside track to any of the central banks?  It would be very helpful if one or more central banker could raise the value of the US dollar at the same time as we start our selling campaign.

It would also be very helpful if you people used your influence with the governing body at the various futures exchanges to tell them that what we are doing is simply ‘normal market behavior.’

If we all work together, then you and your fellow bankers will be able to buy back the contracts you sold high, at a lower price, and my fellow SUA members and I will be able to buy ‘real silver’ cheaply from the mining industry, since these people still have not figured out our game and have not yet banded together to form a suppliers cartel.