Over the last several months we have been pondering if governments will come into the silver market. Before we get into that, it is important to note that governments are very different animals and there are over two hundred of them out there. Therefore, it is a very liberal generalization to lump them all together as if their needs, objectives and agendas were the same, thus expecting them all to act in the same fashion for the same reasons, is a big stretch. That said, it’s the stigma, the psychological effect, the sentiment and the message it would send to markets that prompts us to group them together in investors’ minds as a market force.
This same topic has been argued in the gold space for several years and now it has come to pass that central banks worldwide have thrown in the towel and became net buyers of gold. Should it be different for silver? By the way, did you notice, how silver silently became mainstream again and more and more headlines now read “Gold and Silver…” whereas only a couple of years ago silver was nowhere in sight of anyone except the dreaded silver bugs.
Much has been made about “manipulation” in gold and, particularly of late, in the silver market. Scores of articles have been written on the subject, and things got as far Washington , DC where CFTC held hearings on the subject. We don’t subscribe to the theory, or, more precisely, we don’t share the conspiracy context of it. After all, few seem to care about governments’ involvement in industry, stock market, banking system, housing, etc. All of that is being done openly and has been for a decades, albeit at a grander scale lately, so why is it a big deal in the silver market?
- Buy Silver….Now! While it’s Cheap – The Daily Reckoning (postamericana.wordpress.com)