Silver in Political News
(Peru Strike, Commodity Legislation & Freedom Candidates)
Silver Stock Report
by Jason Hommel, June 2, 2008
I would like to remind my readers of the monumental sea change
developing in the silver market this year as the silver shortage continues
as investors turned into buyers instead of sellers in 2008 when gold
topped $1000/oz. and silver topped $20/oz. and the precious metals begun
to capture the attention of the masses. Investor selling used
to meet the deficit in silver, because industry consumes more than
the world mines. But not only are investors not helping to
fill the supply/demand gap, they are widening it, as they are demanding a
part of that new mine supply too, which is causing the long predicted
This is like what happened to Mono Lake in Nevada
in the mid 1980's and 1990's. Rivers of water that fed into the
lake were diverted to LA, and the lake began to dry up as it began to
evaporate faster and faster.
The silver price should be soaring
above $20/oz. right now, but it's not, which, to me, proves the case that
the silver market is manipulated by the paper exchanges.
asked me, "Why don't the silver mines raise price for silver, or stop
selling silver until the price rises?" The problem with that
approach is that they can't. They have costs that they have to get
back. Further, mines don't generally produce silver, they produce
There are only a few mines that could withhold
silver, or ask the refineries to deliver silver in return, instead of cash
credits. Those mines are the ones who produce silver as a
by-product, who produce 70% of the world's mined silver. But for
them, since silver is not their main area of business, they are
paradoxically most able to afford that strategy, and yet, they are the
least likely to do it, because they might not know enough about silver or
might not care enough about trying to "end the manipulation" in silver,
again, because it's not their area of expertise or focus.
fact, the largest silver mine in the world, which is a pure silver mine,
the Cannington silver mine, is owned by mining giant, BHP Billiton, who is
also least likely to act to withhold silver, even though it would be a
great strategy for them, and although they are most capable of affording
it. It seems the bigger they are, the bigger mistakes they are
capable of making.
It seems that some "small miners" understand
Peru, the number one silver producing nation in the
world, producing over 100 million ounces, is facing a miner's strike,
due June 16th.
strikes by Peruvian miners have put pressure on international metals
Since the silver price has moved down since this news
item, I can only assume this event is not yet being priced into the
silver market, maybe also because the strike has not happened yet.
A few years ago, many hedged miners in Mexico got into trouble by
hedging production at low prices, and then, as metals prices rose, workers
demanded higher wages, but the company had to ask workers for a pay cut,
because they were losing money on the hedges!
prices rising, and they expect a piece of the action. And they are
not the only ones. Politicians, too.
Cotton-Price Swings Disrupt Farmer Sales, Spark
Lieberman, chairman of the Senate Homeland Security and Government Affairs
Committee, said May 20 he is considering legislation limiting large
institutional investors in commodities markets.
The legislation would be aimed at speculators and other investors
who use commodities to hedge against swings in other investment
instruments such as stocks and the U.S. dollar, Lieberman, a Connecticut
independent, said during a hearing.
LAWS AGAINST BUYING OIL -
GOLD & SILVER?
much as I dislike the futures markets, and consider them manipulative, I
think that it would cause more harm to shut them down, or to limit
speculation. Well, if they limit speculation in the "necessary"
commodities, I think that would tend to push investment into
silver and gold, which are so "unnecessary!"
I don't take
Lieberman's threat seriously. I think it's actually a good
sign. I think Lieberman is just noticing all the money being made in
commodities, and is "threatening" certain legislation, which is sort of
like a shakedown. I think he anticipates that the threat of such
legislation can shake loose some kind of "campaign contributions" to get
him to change his mind.
This also could be a sign of
desperation on the part of the money managers. They want to print
unlimited amounts of money, but they begin to cry to high heaven if people
buy real limited things with the money as investments to protect
themselves from the inflation.
A sure sign of impending
hyperinflation is both the rush to commodities as well as the desire
to ban such investments.
But an even greater sign of positive
things to come is that not all politicians are so clueless. And
furthermore, many more people are starting to understand the benefits of
So far, eight "freedom candidates", out of at least
40, many inspired by Ron Paul, have won their primary elections,
with many primary elections yet to come.
of the 40 "freedom candidates" running for the U.S. Congress or
Senate have primary elections tomorrow, on June 3rd. They want
District 4 v.
District 51 v. Bob Filner (D Incumbent)
Dr. Murray Sabrin
For U.S. Senate v. Frank
Lautenberg (D Incumbent)
District 2 v. Frank LoBiondo
State Senator Joseph J. Carraro
District 1 (Open
Many of the other primary elections continue through September.
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