Socialite says Socialism is Anti-Social
(And Locking in prices is "price fixing")
Silver Stock Report
by Jason Hommel, June 17th, 2012
Socialite says that Socialism is Anti-Social
Click the Link to watch the video at youtube.com
In other News:
London surrenders London Metal Exchange
"Hong Kong Exchange & Clearing has paid £1.4bn for the London Metal Exchange, a company which makes £11.2m operating profit - a multiple of more than 124 times."
I wonder if this sale was done in order to limit, or shift, or socialize, the liability of an impending failure of the silver market? If China is the major bullion buyer in the world today, and if China's buying silver and gold is going to cause the LME to go bankrupt, why not sell the LME to them in advance?
At the start of this bull market in silver, when the manipulators began their organized retreat from manipulating prices, the COMEX went public. I made the same observation then, that the COMEX exchange itself was an important backstop that backed up all contracts, and thus, enforced margin calls on brokers. But if the COMEX is a public company, with the owners being shareholders, this limits the liability of the shareholders, and thus, removed one of the guarantors of last resort of futures contracts.
This sale of the LME passes the buck of the liability in my opinion, and exposes the liabilities of a failing institution.
This reminds me of another point. Many of my readers have asked me why don't I take delivery of silver at the COMEX to help bankrupt them. Well, to answer that, if I'm a creditor and they go bankrupt, I lose money!
Look, if there are two sources for silver, and one takes 1 week to ship, and the other takes 2 months to ship and might delay that by another month or two, where would you shop?
The truth is that silver users rarely buy silver at the COMEX. The reason is that their delivery terms are completely unacceptable for any real business.
Here's another way to condemn the COMEX. The ostensible purpose of futures contracts is to help users "lock in" a price. This is silly. Locking in prices is simply another term for price fixing. No respectable economist these days will justify price fixing. Nearly everyone in society, even nearly all journalists, even those with a liberal education, knows that price fixing does not work, and is illegal, or should be illegal. Price fixing is often a symptom or result of the failed economic policies of socialism or dictators.
Yet, here we have the COMEX, a place where people can "lock in" and "fix" prices, and the institution is allowed to operate in full view and plain sight.
Fixing prices for delivery 3 months down the road makes no sense to any producer. It ties up valuable capital to pay in full at the start of a 1 month delivery month, and not get delivery until the end of the month, or have to wait even longer. In contrast, a real wholesaler of silver can put silver in the mail the same day a wire comes in, and the US post office takes only 2-5 days for delivery.
Locking in silver prices makes no sense, given the fact that all silver is sold in the spot market on a regular and daily basis, so the price 3 months down the road is irrelevant.
Locking in prices for 3 months down the road, "to stay in business" makes no sense, given the fact that most businesses intend to stay in business far longer than that. So, on the one hand, waiting 3 months for delivery is ridiculously insane and takes way too long, and on the other hand, locking in prices to be able to continue in business for at least the next three months makes no sense at all.
None of the justifications for the existence of futures markets makes any sense if you take just a bit of time to examine the arguments.
We buy and sell silver and gold at free market fair prices: www.jhmint.com. And we pack and ship silver the same day your wire comes in, about 80% of the time.
If you have not done so, click the Link to watch the video at youtube.com:
Socialite says that Socialism is Anti-Social
I strongly advise you to take possession of real gold and silver, at anywhere near today's prices, while you still can. The fundamentals indicate rising prices for decades to come, and a major price spike can happen at any time.
JH MINT & Coin Shop
13241 Grass Valley Ave
Grass Valley, CA 95945
Minimum telephone order $5000 for free shipping, USA shipping only.
Open 10AM to 5PM Pacific Time, Monday to Friday, closed weekends and bank holidays. (Also Closed from Dec. 25th to Jan 1st)
Kerri handles internet phone orders:
NEW Location in Auburn, CA!
JH MINT Silver & Gold
1760 Highway 49 A140
Auburn, CA 95603
You can also buy silver from my mom at www.momssilvershop.com
Mom will ship overseas, even large orders up to $300,000 or larger, and also in lots of more or less than 100 ounces.
3510 Auburn Blvd #12
Sacramento, CA 95821