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Maybe gold is affected by squeezeflation, which is a form of...

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sergeant

6,224 Posts.

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27/08/14

11:10

Post #: 13879246
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Originally posted by siameseparrot ↑

Why won't the miners fight back?

Bill Rice, Jnr. Monday, August 25th

By now I must have written scores of columns on gold and silver price suppression. Many of these columns have posited on events that might change these anti-free market tactics.

What I haven’t written about, however, is the group that is most adversely affected by the price suppression and, arguably, could do the most to change the status quo.

For some reason(s), the companies that mine precious metals have been strangely silent on the topic. To many of us, the lack of interest displayed by mining executives on a topic that literally affects their companies’ bottom lines - and perhaps even their ability to remain in business - is both bizarre and frustrating in the extreme.

If there is a meeker or more passive group of “leaders” in a commercial industry than those found in the precious metals sector, I’m not aware of it.

In the couple of years I’ve been buying silver coins and acquiring stocks in silver mining companies, the silver price has fallen more than 60 percent (from nearly $50/ounce to $19.35/ounce today).

Maybe somebody can help me out here but I can’t think of any other commodity, product or service that has plummeted by this percentage in the span of less than 36 months.

In fact, the price of just about everything (except precious metals) has been soaring. That is, inflation (correctly reported) is sky-rocketing - except for the commodities that common sense says will also rise during conspicuous periods of rising prices.

But real deflation exists (alone?) in the precious metals sector. This despite the fact that “demand” for gold and silver have risen at rates above available supply.

I just read an article that showed a graph of investment demand for silver over the past several years.

In the year 2013, demand for investment silver (as measured by actual sales) was almost five times higher than in 2007. Industrial demand was about the same but overall demand (sales) was up significantly.

Normally, when a product’s price plummets like the price of silver has you expect to see either much greater supply (which hasn’t materialized) or demand for this product falling off a cliff. Instead, demand for physical silver, as far as I can tell, has never been higher.

So supply and demand realities do not seem to explain a plunging price, especially when you remember that the prices of just about everything else have been rapidly rising (including the costs of getting ore out of the ground).

The conclusion many of us make from these observations is that something is amiss in the precious metals “markets.”

When supply and demand don’t matter and when your own costs to produce a product don’t matter, you might be operating in a rigged market.

If such a scenario was impacting the bottom line of, say, ranchers or oil producers or farmers or pharmaceutical companies would the “movers and shakers” in these sectors effectively shrug their shoulders and take it?

I don’t think so, but for all intents and purposes this has been the indifferent attitude displayed by mining company honchos.

Three scenarios ...

Apparently, this collective group has concluded that either: A) The price is NOT rigged and the markets are working just as they should; or B) any conceivable protest or actions they may take would not succeed in changing the status quo; or C) Pro-active actions might even be counter-productive.

The full read is at http://www.silverseek.com/article/why-wont-miners-fight-back-13526

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Maybe gold is affected by squeezeflation, which is a form of inflation by weight. i.e. putting less gold into the jewellery but selling the jewellery at the same price. Its happening everywhere else in consumer land, why not with gold? Just asking....
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