Wednesday, October 27, 2010

Silver poised to soar on manipulation report

If you read nothing this week you should read this short quote from Bart Chilton of the CFTC with regards to the silver market.

"There have been fraudulent efforts to persuade and deviously control that price,"

No hedging or waffling in that statement is there?

While the CTFT has not reported on its two year investigation into silver market manipulation, I believe this quote is an attempt to telegraph to the market that these complaints will be totally substantiated and very soon.

While I'm not entirely clear as to the extent of CFTC powers to fix this problem, I assume it could lead to criminal charges, fines, position limits perhaps even trading bans.

This could very well be the event that finally frees silver to find its own price level, one which I believe will be a hell of a lot closer to its historical ratio than it is now. My bet is a 30:1 silver to gold ratio (or better) within 2 quarters if the report comes out proving manipulation. That would be about $44/oz

It could however be a lot more explosive than that so I’d suggest you get out there and clean out the coin stores now. Paper will be repudiated very soon, demand delivery on contracts and certificates if you have them or cash them out and go find physical bullion somewhere else in the market. Many junior miners still look quite undervalued; if you have money locked into retirement plans do some research on pure silver plays.

I think this is going to get fun.