When Silver Sneezes, Derivatives Will Catch A Cold
What would a silver market default look like? Look no further, because a silent default is happening now. The cash settlement mechanism for the default has been well-established and put in place for that purpose.
Cash settlement for now, nevertheless, without physical delivery for industrial users, would send shock waves throughout the industry. The drama is enough to trigger a panic, despite any ability of some users to switch or find substitutes.
Like all financial defaults, the break in confidence is what leads to the inflection point. Once the infection point is reached and people realize how much they have been taken for, a serious catalyst could trigger major defaults.
CDSs and the Derivative Bubble
Why would it trigger Credit Default Swaps? Basically, with derivatives amounting to trillions of dollars in paper assets, once the first domino falls, the entire world financial system will be in jeopardy.
What would it trigger? A financial and economic disaster the likes of which would make the experienced of 1920s Germany, Argentina and Zimbabwe to name only a few, seem like a walk in the park. Once the real value of fiat currency (ink and paper) is reflected in a loss of public confidence, all hell will break loose.
Rick Rule – Here Is The Investment Opportunity Of A Lifetime
Today one of the wealthiest people in the financial world spoke with King World News about the ongoing war on gold and silver and what investors should expect going forward. Rick Rule, who is business partners with billionaire Eric Sprott and the CEO of Sprott USA, has rarely ever been as bullish as he is right now in his long run in this business. Below is what Rule had to say in his powerful interview.
Rule: “The thing that is most interesting to me right now is the turbulence in energy markets. The energy markets are so large and there has been such incredible turbulence in them that it has definitely caught my attention. The focus of my financial attention has been attempting to get either debt or equity deals done among the micro-cap issuer community in junior mineral or exploration companies. In that I have been unsuccessful….
JPM APPEARS TO BE GETTING OUT OF THE SILVER MANIPULATION GAME
JPM is getting out of the silver manipulation game. Perhaps they’ve been warned by the CFTC.
Perhaps they simply see the writing on the wall. It’s impossible to say.
Paper Vs. Physical Gold – Picturing The COMEX/SGE Divide
Questions over the legitimacy and transparency of COMEX and the London Gold markets are now becoming louder, especially as increasing numbers of institutions are keen to know what actually backs those contracts. ‘Paper gold’ is on everyone’s lips.
So much for the summer doldrums! After the markets closed yesterday, Ben talked the markets up again even gold. He said the easy money spigot will remain open. Wax on, wax off. Bob talks market manipulation with Bill Murphy of GATA.