Arab Spring spreads to the United States.
As operation Occupy Wall Street buds into a potential monstrous patch of weeds scattered throughout, what would be, otherwise, a bankers Garden of Eden, with unconfirmed reports of the Transportation Workers Union, Teamster’s Union and Verizon Workers slated to join in on the bankers bashing this week in NYC, the silver market, too, is undergoing its own protest—of sorts—against the Monopoly money of the bankers—the U.S. dollar.
Speaking with Financial Sense Newshour’s James Puplava, CEO of KDerbes Precious Metals, Kathy Derbes, told listeners that September’s swoon in the silver price sparked a shocking revolt against paper money, as her clients came in with “extraordinary buying” for all silver products “across the board” in a frenzy to trade paper for precious metals, especially silver.
Derbes account corroborates reports out of King World News’ Eric King, who interviewed Eric Sprott of Sprott Asset Management last week, in which Sprott said his firm had been wiped clean of its silver stock during the huge price drop of the week ending September 30.
Similar to Sprott’s clients, Derbes’ explained that her clients are well-healed, shewed investors who are acutely aware of the bullish fundamentals underpinning the bull market in silver. In fact, in the minds of these investors, according her, the reasons for converting paper money to hard-money have intensified. “They know what’s going on,” she said.
While the selling intensified in the silver futures pits last week, Derbes said her clients previously had picked up on the paper game played at the Chicago Mercantile Exchange (CME) and don’t interpret the price drop as a disappointment. The opposite reaction, she said, is true: these investors see the calamity as a gift.
“That [silver's 30+ percent drop within three days] was intense selling for a myriad of reasons, Derbes explained. “But while that was going on, my clients on the physical side have had just extraordinary buying.”
“I think investors are really smart; they know what’s going on. They understand that these price breaks, particularly this time around, are not telling us anything about fundamentals of gold and silver,” she continued. “In fact, I think the reasons for owning it have gotten a lot stronger. It’s basically a reaction to, in my opinion, short-term liquidity needs brought about by a number of different issues going on in the macro environment.”
Not only have premiums increased for sovereigns and privately-minted silver coins at bullion dealers during last week’s sell off, dealer delivery times are expected to match the delays following the aftermath of the global 2008-9 sell off. At that time, reports from dealers across the globe indicated long lead times for larger orders, most notably, of which, came from Sprott Asset Management and the subsequent ongoing drama associated with protracted delays in delivery of its 694-ton silver order in late 2010.
On Jan. 10, 2011, Sprott issued the following news release:
As of Nov. 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of Dec. 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by Jan. 12, 2011.
Derbes believes the market for silver may become tighter, still, in subsequent weeks and moths ahead following last week’s massive drop in the spot price at the COMEX. Coin premiums have soared on Thursday and Friday of last week, just as they had during the last steep correction in paper silver two years ago.
“We’re probably in the beginning stages of what could be shortages; it certainly looks that way, so we’ll have to wait and see what happens,” she reckons. “I’ll tell you this, the buying has not stopped. If anything, it’s intensified this week. It’s pretty amazing.”
“We have to remember that it’s [silver] a market that cannot be printed into existence like the paper currencies.”
The Occupy Wall Street movement is the latest in, what appears to be, an ongoing and more intensified crises in confidence in US institutions. While protestors descend on Wall Street to voice their anger regarding its government taking side with big bankers and the Fed during the toughest economic times since the Great Depression, investors in droves are casting their vote against the paper dollar and in favor of hard money—gold and silver.