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Let it die.BoyBlue_1985 said:
An Open Letter to Mr Osborne
- Thread starter Mike D
- Start date
metalblue
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twinkletoes said:
I have heard the allegations, I don't believe they have done anything untoward, I've read some of the theories espoused as to why they have done wrong and they appear to come from people with very little understanding of how things work. Physical commodity trading can be somewhat complicated but I'll give you a simple example of how it works:
We have a commodity called "frozen pies"
There are currently 50,000 "frozen pies" in the world, stored in 5 primary distribution centres, new York (has 20,000), Berlin (5,000), Paris (5,000), London (8,000) and Manchester (12,000)
Each of these frozen pie storage facilities charge me 0.01p for each day I store a frozen pie there.
Most pies are eaten in the UK of which most are eaten in the north west
The "frozen pies" future is the right to buy or sell a frozen pie on the contract expiry date and the future trades for 12 monthly periods (sep12...sep13).
During the course of trading there are many things going on but for this exercise I will focus on 2 things:
Firstly the frozen pie producers and frozen pie retailers will want to fix there sale/purchase price...they can do that by buying and selling frozen pie futures. However the problem for the purchaser is that he might have his pies in a location that is too far away (in fact the price of the futures contract is based on the least desirable location, which will be NY in our example)
This is where the second thing comes in the physical trader, they will look at the location of all the frozen pies in the world and decide they want to own as many pies as they can as close to the most demand (north-west UK in this case) as possible - however they don't want to own the pies "outright" and "forever" they want to own them for as short a time as possible at the time of the highest anticipated demand. In our case we will assume frozen pie consumption is greatest during winter so the physical trader does something we call the "carry" or "cash and carry" trade in that they buy frozen pies in, say November and sell frozen pies in December, the difference between the buy and sell price should (hopefully) cover a lot of the cost of ownership of the frozen pies (remember I have to pay 0.01p per pie per day as well as my "financing" costs for having brought the pies outright and insurance against bindippers coming to nick me frozen pies). Now it's no good me just buying 1 frozen pie I want to "own" all the pies as close to demand as possible (I don't have unlimited money to just buy every pie)...I know the first pies I get will be based in NY, then Berlin, Paris, London and lastly Manchester so I know I have to "borrow" at least 20,000 frozen pie futures just to start to own a pie in Europe...then another 10,000 just to own a pie in the UK, and another 8,000 to just own a pie in Manchester...all the time my carry trade is paying me less and less as people become reluctant to sell me their pies in these locations. Once I own as many pies as I can I now (hopefully) "control" the frozen pie market, if you remember the pie retailer who fixed his frozen pie price would be given his pies in NY so he will come to the physical market and ask how he can swap the NY based pie for a Manchester pie and the physical trader will quote him a price (normally a little under how much it will cost him to ship from NY to Manchester), this may be more than he wants to pay so he might then ask how he could swap the NY pie for one in London, Paris etc. Come the December future delivery date the ownership of the pies moves to other physical trader(s) and on it goes.
Some people would look a this and scream "manipulation" but all I have done is try and "undercut" the transport firm...and it doesn't always work as I can attest
Sorry SWP ;)
twinkletoes
Well-Known Member
Cheers again mate. My head hurts a bit after that.
I will tell you what I read last night.
JP Morgan have actually cornered the market for silver and they have suppressed the price. They have a little over a 25% position in the short market for silver futures.
JP Morgan say they dont own the silver. They are only holding a position for a client as a hedge. The client they represent is the Federal Reserve which wants to suppress the price of silver in order to keep bond yields low.
The Fed do it on behalf of the US government and it is part of a national security strategy.
I know it's going to be siezed upon as a conspiracy theory by some but I just wanted to see what you thought and whether you thought it was possible to do it.<br /><br />-- Fri Aug 10, 2012 8:32 am --<br /><br />
Even if you think it's all bullshit, it is a very interesting world and the machinations of banks and governments intrigues me the more I look into it.
I will tell you what I read last night.
JP Morgan have actually cornered the market for silver and they have suppressed the price. They have a little over a 25% position in the short market for silver futures.
JP Morgan say they dont own the silver. They are only holding a position for a client as a hedge. The client they represent is the Federal Reserve which wants to suppress the price of silver in order to keep bond yields low.
The Fed do it on behalf of the US government and it is part of a national security strategy.
I know it's going to be siezed upon as a conspiracy theory by some but I just wanted to see what you thought and whether you thought it was possible to do it.<br /><br />-- Fri Aug 10, 2012 8:32 am --<br /><br />
BoyBlue_1985 said:
Even if you think it's all bullshit, it is a very interesting world and the machinations of banks and governments intrigues me the more I look into it.
SWP's back
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My bets looking golden 2/3 of the way through the year Rammy
metalblue
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twinkletoes said:
It is a reasonable response from JPM. Most PGM contracts traded are OTC, therefore banks can end up being heavily exposured to a single direction (client sells, bank buys) - banks will "lay" that risk with other banks (by interbank trading) but that "eats" up interbank credit lines (even if I buy and sell I don't net the exposure, I double it up). Therefore hedging on an exchange (treasury guaranteed) is a perfectly reasonable thing to do...so what JPM are saying is against the listed (exchange) shorts they have client shorts and therefore JPM are pretty "flat" (have no significant position). The spotlight falls on JPM as they are the biggest PGM house out there, is it possible they are up to "no good"? of course but I doubt it.
Silver demand is trending upwards and production is lagging demand, this results in stockpiles erroding and this continues and eventually you get to a point that demand outstrips supply and silver prices rally. I don't see any correlation between silver prices and interest yields.
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Can you explain that bit to me?twinkletoes said:
twinkletoes
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SWP's back said:
It's because silver and gold are a competitive currency that, if allowed to function in a free market, determines the value of other currencies and influences interest rates and the value of government bonds.
I am still half way through what I am reading up on it but it has been done with gold for decades.
-- Fri Aug 10, 2012 9:54 am --
metalblue said:
I darent ask you anything else at the moment because my head is hurting every time I read one of your posts. So cheers for now. Appreciated.
Just a postscript to what we have talked about. Apparently Ben Bernanke recently said in a congressional hearing after he was asked whether gold was money a d he said it wasnt and that it was a precious metal and was held by central banks because it is a "tradition".
M
M
mat
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BoyBlue_1985 said:
[youtube]http://www.youtube.com/watch?v=TnpuWSFnDQ4&feature=share[/youtube]
Sun Jihai's ghost
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This is an interesting thread, I've been following the Precious metals market for years and there is a tonne of reports out there which provide pretty strong evidence that the market has been manipulated for some time. As with most things in the financial markets it is near on impossible to prove so you have to make up your own mind.
This article does a pretty good job of summarising the anomolies in the gold market. Price goes up during Asian hours and down during US market hours...but the overall price trend is up. Over an extended period of time that type of consistant trend makes no sense when you are in a bull market. http://www.minyanville.com/business...ices-invest-gold/8/30/2010/id/29856?page=full
This pattern was so predictable and consistant that a couple of guys programmed an algorithm to frontrun the "manipulation" and did very well out of it (I will post the article if I can find it)
Here is an article pinpoints the shennanigans that has occured inthe silver market, this is just one instance of it but there are plenty more exampleshttp://www.zerohedge.com/news/catching-silver-crusher-algorithm-act
Eric Sprott and his business partner John Embry have been talking about this for years. These guys are no conspiracy theorists,their company manages over $8 billion in assets, if you want to find out more about the silver manipulation take a look at some of these guys articles or clips on youtube.
http://kingworldnews.com/kingworldn...xes_From_The_70s_Wont_Stop_This_Disaster.html
This article does a pretty good job of summarising the anomolies in the gold market. Price goes up during Asian hours and down during US market hours...but the overall price trend is up. Over an extended period of time that type of consistant trend makes no sense when you are in a bull market. http://www.minyanville.com/business...ices-invest-gold/8/30/2010/id/29856?page=full
This pattern was so predictable and consistant that a couple of guys programmed an algorithm to frontrun the "manipulation" and did very well out of it (I will post the article if I can find it)
Here is an article pinpoints the shennanigans that has occured inthe silver market, this is just one instance of it but there are plenty more exampleshttp://www.zerohedge.com/news/catching-silver-crusher-algorithm-act
Eric Sprott and his business partner John Embry have been talking about this for years. These guys are no conspiracy theorists,their company manages over $8 billion in assets, if you want to find out more about the silver manipulation take a look at some of these guys articles or clips on youtube.
http://kingworldnews.com/kingworldn...xes_From_The_70s_Wont_Stop_This_Disaster.html
BoyBlue_1985
Well-Known Member
mat said:
Wanted something bit more exciting like Rothschild burns homeless children to heat his home