Silverpriset: The likely outcome

Ted Butler har släppt en ny artikel gratis, läs här: The New Law of Supply and Demand

Här är några rader:

If you accept my contention that gold and silver prices have been smashed lower due to speculative selling (and not overproduction by real world producers), including a large amount of short sales that must be bought back, then it is reasonable to assume what caused prices to fall will also cause prices to rally. The same selling force responsible for falling prices must be responsible for rising prices when the force is reversed from selling to buying. In fact, the actual measurement of that force will be determined by how quickly the short sales are bought back versus how much time it took to sell them originally. By my observation it has taken about five months (so far) to accomplish all the speculative selling. (If I had to pick one date, it would be Feb 5). Over that time gold prices have fallen by more than $400 and silver by more than $13.

All things being equal (and I know they never are), if an equal amount of buying came in over the next 5 months (assuming we’ve seen the bottom), gold and silver prices could be expected to climb by the amount they have fallen. If the buying occurred over a longer period of time, it would take longer for prices to recover. However (and this is my point), if the buying were condensed into a much shorter time frame, the price would recover much quicker. That’s the likely outcome, as I see it.

Speculative short sales are special in that they tend to be bought back quicker on price rises than any other type of buying transaction. That’s because there is no limit to how high prices can rise, whereas prices can’t go below zero. Shorts get real nervous when prices start to rise. If we rise enough in gold and silver (and we will rise enough in time), the tempo of buying back short sales will increase, which in turn will cause prices to rise even further. Considering who the sellers will be at that point (think JPMorgan and other commercials) it’s highly possible the speculative shorts buying back will be forced to pay enormously higher prices.

Of course, I can’t guarantee this is what will occur, but I’d be negligent not to outline what I feel could occur. If prices stay or go lower, we’ve only begun to see the damage to real world producers due to the perversion of the law of supply and demand. If prices go higher, the possibility of an explosion exists like never before.



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