Ruh Roh Silver

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Sometimes you can count on the manipulation conspiracy theorists to get it exactly wrong. Not just a little bit wrong, nor halfway wrong. Not even mostly wrong. Totally wrong, backwards.

Michael Crichton, in talking about the Gell-Mann Amnesia Effect said this:

“You open the newspaper to an article on some subject you know well. In Murray’s [Gell-Mann] case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the ‘wet streets cause rain’ stories. Paper’s full of them.

In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate. You turn the page, and forget what you know.”

The headlines blaring about the “disconnect” between paper and physical silver have got it even worse than this. They are, in effect, saying “wet street caused sunshine!”

So What Happened?

Paper was bought up at a furious rate, by speculators using leverage. We assume that they are trying to front-run a GameStop-level gain of 12X.

Don’t believe what you read: that the price of physical silver has moved much higher than the price of paper. In fact, it’s the price of a futures contract that took off. When last we wrote (on Friday), the premium to buy a March futures contract, compared to spot silver, was 10 cents.

On Monday, this premium hit 50 cents, as we shall see below.

The conspiracy mongers prey on confusion between silver Eagles and spot silver. Retail customers often buy these coins. But coin manufacturing depends on tooling, which is inelastic. It does not increase its capacity when a million retail buyers read an article on Reddit. So the premium for minted silver products can skyrocket.

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Disclaimer: The content in this article is provided as general information and for educational purposes only and should not be taken as investment advice. We do not guarantee the accuracy ...

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