Menu Close

James Turk – Silver in Backwardation, Set to Explode

Who is right?

Or are both right, since “this time is truly different”?

(Armstrong has not touched on silver at all in his more recent writings as far as I can recall.)

James Turk – Silver in Backwardation, Set to Explode

What this backwardation shows is that there is a disconnect between the physical and the paper markets in silver. As I said previously, the silver shorts simply cannot hold the paper price down here any longer without seriously discrediting the paper silver market as a price discovery mechanism.
__________________________________________________________

Silver Manipulation, Squeeze or Bull Market? Part II By Martin A. Armstrong © 02/20/98 Princeton Economic Institute

. . . Bull markets NEVER begin in backwardation – they end in backwardation! During the bull market of 1980, silver NEVER moved into backwardation until the very tail-end of the rally. The backwardation in 1980 was caused by the fact that the public was standing in line selling their sterling silver flatware and coin silver. There was so much silver around, but it was not in the PROPER form for delivery on the COMEX. . . . For this reason, the forward and futures contracts were selling at a discount to the current spot market. . . . Manipulations are ALWAYS distinguished by someone pushing a market into backwardation at the BEGINNING of a rally. They have “squeezed” this market by borrowing everything they could get their hands on thus forcing the spot prices higher. The forwards and future contracts are at a discount because there is NO “real” shortage long-term. The backwardation created by manipulators is intended to create the ILLUSION of a bull market when in fact it is the reflection of a market about to collapse – as was the case in 1980. IF THOSE BEHIND THIS SILVER RALLY WERE TRUE LONG-TERM INVESTORS, THEY WOULD NOT HAVE BORROWED SILVER TO CREATE THE IMPRESSION OF A SHORTAGE THROUGH BACKWARDATION – THEY WOULD HAVE TRIED TO BUY DIPS. Forcing silver prices up this fast PROVES that they are only interested in taking a short-term profit – NOT holding silver for a long-term investment.

Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RSS
Follow by Email
LinkedIn
Share

Discover more from The Wall Street Examiner

Subscribe now to keep reading and get access to the full archive.

Continue reading