The Silver Squeeze

A wild week of trading across asset markets has left investors wondering what represents real value – and whether it even matters anymore.

Stratospheric GameStop shares came crashing back to earth after their gravity-defying run up.  The stock had clearly been pumped to ridiculously overvalued levels based on all conventional metrics. But that didn’t deter buyers who believed they could push it to $1,000 per share before cashing out

After dropping over 85% its nominal price peak, perhaps the GameStop craze has ended just as abruptly as it began.

Meanwhile, some online speculators have jumped aboard other bizarre market frenzies. For example, the crypto token Dogecoin – which launched a few years ago as a joke – spiked this week to a market capitalization of over $6 billion. 

A single tweet by Tesla CEO Elon Musk sent Dogecoin soaring by over 50% on Thursday. Musk, who is now the world’s richest man, stated “Dogecoin is the people’s crypto.”

It’s not clear whether he was serious or joking. But plenty of people took him seriously enough to put their hard-earned money into Dogecoin.

Regardless of whether Elon Musk intended to move Dogecoin prices, either for his own amusement or for the benefit of holders, the incident proves that anything that can be traded can be pumped – and then dumped.

That’s the kind of market environment we’re in, for better or worse. Asset prices are being manipulated wildly on social media sites and internet discussion forums.

Of course, as those of us in the precious metals community know all too well, certain large institutions are well practiced in manipulating gold and silver markets. Big banks including JP Morgan Chase and Deutschebank have paid millions of dollars in fines in recent years over price rigging schemes.

Other types of interventions aimed at suppressing precious metals prices are carried out openly and without any legal consequence.

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Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

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