"Our sales of physical metal yesterday were the second-highest so far this year. Considering where gold is trading, the strength of this demand was surprising. Without necessarily expecting this very high pace of buying to continue, we nonetheless would look for Indian demand to continue at above-average levels, given how willing these buyers have lately been at prices in excess of $1500. Physical demand elsewhere remains subdued. Scrap supply is underwhelming at these price levels." UBS
A nice bounce, but now follow through is everything, for both the metals and the equity markets.
Short term market movements are indeed highly correlated to changes in liquidity if they are present, as even a casual observers knows.
And I would hope that most by now realize that the 'efficient markets hypothesis' is a dead duck, a propaganda piece put forward by the banksters and their demimonde.
This is the theory that the exchanges are naturally fair and neutral parties, perfectly capable of self-regulating themselves so that a level playing field exists for all participants, big and small, insider or not, without any need for regulatory oversight from an official public body. And that participants do not use extra-legal means to gain advantages, paricularly over the non-professional investor. The exchange is like a vending machine, merely taking a small fee for their efforts, and their members would never engage in any trading advantaged by their superior positioning and access to power and money.
The events of the past few years have tossed this canard on the rubbish heap of discredited whimsy where it belongs, although some still reflexively reach for it under duress.
And so when someone appeals to this theory, even if indirectly, to rationalize the recent action in the silver market in which the exchange increased margin requirements five times, in conjunction with bear raids well timed to the off hours, with some of their largest members and customers trapped in massive short positions, you will just have to wonder at the substance and integrity of such an argument.
Most fundamental arguments that appeal to short term market movements as proofs are dodgy in and of themselves.
But let's see what happens. Blythe is not out of money by a long shot, but as the levels of the Comex seem to attest, they remain steadily trending lower on the amounts of silver at their disposal for delivery. Perhaps they can find fresh supplies, but it is unlikely that it will be at lower prices. And so they continue their campaign to discourage and dampen demand.
Volatility comes with wars, even currency wars, and some items are more on the front lines than others.
Therefore I have taken my short term trading profits, and added hedges short the indices to cover what remains. I wish to see if this bounce continues, or if the Street continues to game the markets to perpetuate their perfect trading records.
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| The Architect and Her Nemesis |
