Wednesday, March 10, 2010

One Reason Why Silver Prices are Manipulated

I have been saying for a while that silver is undervalued and its price is being artificially manipulated. Why would someone try to keep silver prices down, you might ask? The best example is demonstrated by industrial applications of silver, which there are many. If you use silver and its cost goes up, you will not make money if you cannot increase your selling price. When any commodity's price go up, companies who use the commodity as a non-substitutable component in their product, but cannot raise their prices to meet the commodities price increase will end up losing out (unless they are able to keep the price artificially low). "This is why gasoline stations close despite increasing oil prices. They cannot increase their prices very much, at the same time the big oil companies increase the prices to them. The reasons they cannot rais fuel prices very much is that competition between stations creates price pressure downwards and consumers are somewhat price-sensitive, even to gasoline, which doesn't have a mainstream alternative (TheStreet.com)." This is a really good example why the price of silver is being artificially held down. However, I believe there will come a day when silver becomes in such demand and becomes so scarce that the man behind the curtain will no longer be able to contain the price of silver. I just hope I live to see that day; but, at least my beneficiaries will be well taken care of. Now I will give credit where credit is due. I do not plagiarize, if I use another's article I give them full credit. I was already writing this article and saw some good examples in a general article on commodities on TheStreet.com. I did use their example and cited them as a reference. Buy silver while it is low!

2 comments:

Kirsty Hogg said...

Hi Greg, Super blog you have here. I like the Wizard of Oz reference... Buy Silver ... Save in it .. Accumulate it over time while you can!

snakeflake said...

I hope you are not the only one who got it ;) Thanks for visiting. Stop by anytime!