In the video below Bix Weir wonders why, with the total mined silver production in 2016 going down by 33 Million ounces (or 3%), did the total amount of COMEX futures and options contracts increase by 41%?
Weir outlines what the level of actual global hedging required would be and what the discrepancy is between this amount and the actual amount of trading in silver on the COMEX is.
He discusses what legitimate hedging would be, but how very few silver miners actually hedge their production these days, having been stung by the run up of the silver price in the first decade of the 2000’s.
For anyone who has followed any of his work, his conclusion as to why this massive increase in futures and options has occurred should be none too surprising.
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