“If you want to find the secrets of the universe, think in terms of energy, frequency and vibration.” - Nikola Tesla
The silver market is always one day from panic. The same could be said for the bond market or the dollar. In the age of electronic price discovery and massive reckless monetary imbalance anything can happen - and it probably will.
It will happen whether by virtue of just in time delivery practices of the user or the massive (and very real short) concentration within the large commercial category of traders on the most important world price discovery exchange.
The lower the price, the less produced; from mining to scrap recycling. It gets worse because the expectations of the future are distorted by the fictions of the present.
One example of this is pension funds that assume a set level of growth to ensure their survival. These numbers are based on a fictional level of GDP growth to begin with, which is based on erroneous estimates of costs for consumption.
The point is that just about everything we believe about our state of economy and money is a fragile fiction. Silver and gold always lead the way for other commodity sectors as the inflation signal for the investment/speculative trading world; despite persistent efforts to 'forget' about their natural monetary status.
Interest rates, CPI, and safe haven flows are key indicators for this group. Every day we should acknowledge that precious metals are a long term hedge against the stupidity of the interventionists. Also, remember the butterfly effect and confidence.
Silver and gold are first and foremost "emergency hedges". Banking and finance in the money for the sake of the money itself.
And yet the money isn't really money - in the true sense of the meaning - any more than the political parties today reflect the true meaning of what they were in days long ago. The control of currency in the name of politics distorts the meaningful movement of capital and savings.
Think about the politics:
What difference does it make? National politicians, with few exceptions, do whatever their handlers tell them. Follow the drunken funny money. Votes 'count' only as a statement of completely irrational and inaccurate world views.
Powerful public relations, marketing, and/or propaganda make it easy to sell large swaths of populace with a story consistent with their world view.
Changing world views can only happen naturally, on its own, and usually as a reaction. But sadly the next shift will come with pain. None of the elite class concerns itself with these issues.
The concern, spawned nearly 100 years ago in the wake of the creation of the Federal Reserve cares about making money for the sake of money. The more risk free, the better. And this is the system they've been able to operate within for generations.
The power that surrounds it is unstoppable except by the forces of nature itself, whether that force comes in the way of natural disaster or the collective will of the starving masses, it will manifest.
Money for the sake of money - the mindset always fails around precious metals and short term valuation. For centuries, precious metals have been an annoyance to this power structure. They can't be traded.
Policy is centered on behavior. Behavior of the masses, but also the behavior within the entire capital complex. They have not been able to fully suppress the prices of metals because there is a physical limit. No matter how often it is denied, there is a severe limit and scarcity associated with the precious metals.
Pushing too far on the price opens up new opportunities for predators. They can’t afford an infestation of longs standing for delivery. Nor can they risk a natural retail flow to physical metal during the next crisis.
But they can look the other way while the speculative longs chase each other over the cliff.
The risk: You risk not being able to obtain metal in spite of lower prices by waiting. Retail availability can dry up very quickly, especially if the government mint restricts production.
The only precious metals dealers will be able to offer is that which they buy across their counter from the public.