The Great Silver Subsidization

September 5, 2014

Understanding precious metal price reality is like walking through a house of mirrors.

I spend a lot of time examining eyeballs. The magnification required to focus light on the retina is very strong. This causes an inverted image.

What I see in the lower right of my view is actually the upper left area of the patient's eye.

Like everything, it takes some practice. In the days before digital records, I would turn the paper chart upside down to record my drawings.

It is similar to the interpretation skills required when following precious metals.

Prices ought to go up during times of geopolitical crisis or tension. They typically do not.

They do predictably go down during certain monetary-related announcements or during paper market-related events such as options expiration.

Or any other times that are ultimately profitable for the large banks - because of the sheer size and concentration of their naked short positions.

This is also somewhat backwards.

Most people understand cornering a market on the long side. But the opposite requires one to stand on their head.

Stand on your head, and one begins to see a reflection in these otherwise-considered commodities. The monetary side.

But it goes even deeper.

At this moment, the market is viewed as bearish by an almost giddy trading culture - drunk on free money and the ever rising DOW and S&P 500.

Traders riding the mountainous waves of liquidity.

They speak the language, yet refuse to acknowledge that their game is rigged. Like children arguing about the World Wrestling Federation. 

Yes, with precious metals, you have to stand on your head to see things accurately.

There are two main factors holding silver prices back, making things appear upside down.

  1. The long-term price controls have enabled ridiculously bullish physical fundamentals.
  2. Monetary policy has resulted in an inflation adjusted price that would be orders of magnitude higher if properly factored.

Low inflation adjusted prices, plus physical fundamentals.

Adding up to a potential price well north of practically anything we can imagine.

For now, lawless financial intervention maintains the grand illusion.

For investors seeking shelter, preparation, and a physical store of wealth, silver prices represent the granddaddy of all subsidies - viewed upside and backwards.


For more articles like this, including thoughtful precious metals analysis beyond the mainstream propaganda and basically everything you need to know about silver, short of outlandish fiat price predictions, check out

Man has had the ability to separate silver from lead for as far back as 4000 B.C.