{"id":4225,"date":"2011-05-14T06:10:14","date_gmt":"2011-05-14T12:10:14","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=4225"},"modified":"2018-09-21T02:06:18","modified_gmt":"2018-09-21T06:06:18","slug":"silver-markets-rise-due-to-chinese-speculation","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/05\/14\/silver-markets-rise-due-to-chinese-speculation\/","title":{"rendered":"Silver Market’s Rise Due to Chinese Speculation"},"content":{"rendered":"

Yesterday morning the Financial Times ran a story about Chinese retail investors being the source of the rocketing prices for silver worldwide<\/a>.\u00a0 I have been saying nationally that commodities are in a bubble.\u00a0 Want proof of the froth?<\/p>\n

On the Shanghai Gold Exchange, where precious metals futures are traded, turnover in silver contracts (i.e. the number of contracts bought and sold) has risen 2,837% (!!!!!) since the beginning of the year.\u00a0 Oh, my God!<\/p>\n

Let’s put that in comparison in terms of a bubble.\u00a0 Those silver contracts that the Chinese are trading represent 70 million troy ounces.\u00a0 Each year worldwide, according to Wikipedia, total silver production is only 671 million troy ounces.\u00a0 So the Chinese trading represents 70 mm \u00f7 671 mm = 10.4% of total silver production.<\/p>\n

This may not sound like a lot, but as I reported earlier this week during the dot.com era the value of U.S. equities (i.e. S&P 500) being traded on a given day was on average only 0.6% of the total value of the entire market<\/a>.\u00a0 So the Chinese silver trading – and this is just one commodities market<\/em> – represents a bubble that is: 10.4% \u00f7 0.6% = 17.3x bigger than the dot.com bubble.\u00a0 Oh, my God, Part II!<\/p>\n

Folks, to all of the talk that the commodities surge is due to inflationary monetary policies that will collapse the worldwide economy and that gold and silver are the only way to protect yourselves, I say that is a load of poo.\u00a0 Why?\u00a0 Those buying and selling gold and silver contracts are not taking possession of the metals they are “trading” – which is what you would have to do to protect yourself in the event of economic apocalypse.<\/p>\n

No, these folks are trading paper contracts on electronic exchanges.\u00a0 So tell me if the world is in the midst of economic apocalypse how likely is it that those paper contracts have value?\u00a0 How likely is it that those electronic exchanges are still operating?\u00a0 What we have here is not apocalyptic thinking, just greed.<\/p>\n

Jason<\/p>\n","protected":false},"excerpt":{"rendered":"

Yesterday morning the Financial Times ran a story about Chinese retail investors being the source of the rocketing prices for silver worldwide.\u00a0 I have been saying nationally that commodities are in a bubble.\u00a0 Want proof of the froth? On the Shanghai Gold Exchange, where precious metals futures are traded, turnover in silver contracts (i.e. the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-4225","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=4225"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4225\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=4225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=4225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=4225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}