Precious metals bullion banks making a killing by killing sentiment

The Role of PM Sentiment

First off, the banks that determine prices are trading houses that go months at a time without a trading loss.

Second, the sample used to measure sentiment is based also on an entirely paper affair.

And finally, poor sentiment merely turns away would-be investors, who are mainly of the electronic or paper variety. Sentiment has effect at the margin, but only for the weakest of holders.

The Core Investor

Real physical accumulators are a tiny minority, but their potential influence is far-reaching as physical offtake ultimately leads to a supply bottleneck, particularly with silver, given its vast industrial offtake competing for investment demand.

Furthermore, a slowly growing pool of readily available supply against a relatively small addition of new supply (from mining) results in a higher stock to flow ratio -- a key feature commodity money.

Buying Back Paper to Accumulate Physical

On the surface, the mechanism by which the bullion banks accumulate metal appears to be hatched by geniuses -- if it were not so completely illegal and immoral. Just because is it not "prosecutable" does not make it right.

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