Interesting article on paper PM instruments' effects on physical metals prices

[jim4silver]

http://seekingalpha.com/article/3161...-and-mf-global

Jim

[mts]

I certainly believe that the paper markets are impacting physical PM prices. However, I'm always amazed that these articles assume that the price is being kept DOWN by the paper markets. For the 20 years from 1980ish to 2000, the price of silver languished at around $5. Couldn't one argue that these paper markets actually increased the price of silver? And couldn't the recent run up to $50 for silver be directly related to the paper markets and not supply/demand? Why do these articles always take the side that the paper markets are keeping prices low? Wouldn't it be just as easy for these bankers to run up the price as it is to keep it low? Conspiracy theorists need not apply.

[Goose-0]

I've been following the silver market since around 1982. I always wondered why PMs always went up 3 steps, down 2 steps, and the stayed dorment for a few months. Then the same thing kept happening over the years. I talked to our local coin dealer, and he also noticed this. In my mind, the PM market is being controlled. Then again, the US guv'ment also might have a hand in this PM control to raise the valuation of the dollar. I think 2012 will be the year of extreme inflation.....I see it magnifying now at the food stores and the gas pumps. And these 2 items aren't included in the guv'ment's 'inflation' reports. Hmmm, I wonder why.