Asking an old timer like me to "tell more" is like putting a bottle of absinthe in front of an alcoholic -- no telling what will spill out as the evening progresses. But this year the back is hurting earlier than usual which means a storm is coming. Meteorological or financial I don't know -- but I suspect both.
Nickel is an important strategic commodity in time of war and stocks have never been lower although the coming report may show increased stockpiles. Any country with a growing military likes a low paper price during an accumulation phase because it's one thing to trade paper -- and quite another to take delivery. LME went into technical default last month by letting shorts off the hook for delivery by paying a "paper penalty."
When I was young man they had a saying in the pits, "He who sells what isn't his'n, buys it back or goes to prison." Which meant if you had to cover a short sale you were at the mercy of the price -- you had to buy it back regardless of physical stocks available. Now that is not the case.
On the COMEX the short position in silver is far in excess of what can be delivered by existing stocks and is concentrated in the hands of Chinese elements who may settle -- or may not. They have plenty of American paper money -- what they want is to increase their strategic silver stockpiles (as well as nickel, copper, etc) and they can most efficiently do this by manipulating the "paper" price down while they are in their accumulation phase.
Growing up I can still remember Father saying, "Free markets make free men." If market prices are artificially suppressed by entities that can sell what they don't own and then never have to "buy" it back, then those same ones manipulating the price downward can in essence send a false signal to the commodity holders and buy at a much lower price.
The truest beauty of markets is that they always correct. Always -- for markets are stronger than the manipulators that seek to acquire a temporary advantage and then flee. The problem becomes when the natural correction overcomes the system's capacity to regain a true balance.
This of course does not take into question the basic unit of account -- the US dollar which has many problems now. The Chinese are very clever as having found that their dollar hoards cannot be spent for American companies -- they will instead use the paper sword to acquire the raw materials they need to build their own companies.
Should a meltdown at either LME or COMEX go parabolic it will spark a fuse that will be difficult to extinguish with contemporary western financial tools. Combined with the oil market volatility generated by Middle East events and a serious question arises about the true strength of the dollar.
Should the worst happen and there be an exchange "accident" triggered by excessive naked short selling then the entire structure will sustain a concentrated systemic shock. At that time we will learn which financial bulkheads are watertight -- and alas -- which ones are merely paper.
HG
Sounds to me like someone is putting a squeeze on the shorts : ) Could it be that you and your gloom and doomer buddies are just angry that you can't squeeze them any more?
And what do you think of the gold standard?