Typically there will be a pop at the open, commercials will watch how far that runs, and then start selling into it, locking down prices for future production, causing that pop to fade out.
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interesting dynamic in play here
with the reddit squeeze on GME you’re pitting robin hoods vs. the hedgers
when they move the action to silver, they’re bringing in the big guns in Chicago
imo, the hedgers are bull dozing vulnerable victims while the commodity traders are real sophisticated financial pros.
these guys are hard to beat.
The traders aren’t sophisticated. They just have the best government money can buy backing them up. They know they will get a bail out no matter what they do.
But that's the stock market. Here, we're talking about commodities that have worldwide demand not just as an investment or inflation hedge, but also for industrial use. It's not just the big boys in Chicago and Philly, it's the Saudis, the Russians and Chinese and more. If there is something brewing, the people brewing it don't really know just how big a dragon they are attacking. A run on silver prices will impact the value of currencies and oil and just about everything else. But, as ever, there are 2 sides to every position so who knows. And as Big has stated several times, the silver producers will be quite happy to see silver spike - they would very happily sell their future production at today's prices using options contracts, and that should keep a lid on prices at least for a while depending just how much money and for how long the demand for silver goes.
Speaking of which, I expect 2021-2022 to become another couple of years of stagflation. So maybe some of the rise in Silver is hedging. There is just too much money printed, too much money being allocated by Congress, and supply chains are still capacity constrained due to lockdowns and restrictions related to the virus. I am a producer and exporter, and everything I buy for production has gone up significantly over the last few months - while some other items are very difficult to obtain or have long lead times to deliver. And I live in California, which just reported it paid out nearly $120 billion in unemployment benefits over the last 9 months. The entire state budget is $220 billion. But I think a lot of that $120 billion is coming from taxpayers via the CARES act. But just for some perspective. That's a lot of money being handed out. One of the main issues in my thesis is that the markets are being distorted by regulators, e.g. the moratorium on evictions. Normally if you don't pay rent they throw you out. Right now they cannot evict tenants. So the tenants who are exploiting this and not paying their rent have tons of cash to splurge on limited amount of goods, thus causing inflation. Meanwhile, however commercial Real Estate prices have come down and landlords are not getting paid, and interest rates are so low, housing prices are skyrocketing. These interventions are a huge distortion. But over time they too should normalize. GDP was up 30% last quarter, but that's mainly because the previous quarter the entire country was practically immobilized. Year over year we are still way down. So if there is no real growth and asset inflation, well... think of Jimmy Carter and say a prayer.