Monday, September 26, 2011

How it went, what it is, how they do it. Wow Silver was what ? $26 ?

Given the military principle of “Concentration of Forces” the forces opposing higher specie metal and commodity prices fight a rear-guard action based on initiative, concentration of forces and coordination of forces, air power ( comex paper), artillery ( media ) and boots on the ground ( physical purchases).

In a military metaphor this lays out perfectly.  The big picture is the forces in opposition to higher (real) commodity prices are fighting a delaying rear guard action, well supplied but on the retreating side.   Using initiative, coordination of forces and interior lines of communication, they are able to achieve "local superiority" to achieve "local breakthroughs"
Now go back to 2001 and look at the progress of this.  As many times as "local superiority" has been used to achieve "local breakthroughs", these in fact, are nothing but spoiling counter-attacks with no real hope of stemming the tide nor gaining the objective of subduing commodity prices, unless they do a "M-A-D" nuclear scenario of Mutually Assured Destruction.  While it is a real threat, it will be by miscalculation rather than bravado, if it might come to be.

Looking at more of this, after the Counter-attacks achieve their “local superiority” to achieve their “local break through”, they do a limited advance to try to “spoil” attacks by breaking up formations or destroying supplies or transport hubs, and thus gain more time.

However that comes at a cost. In this case it is the cost of supplies they cannot replace in terms of “Boots on the Ground” and that is what the peasants come in and take, in this case the physical supplies of precious specie metals that are then absorbed by an aware public, thus exerting area and supply denial to the counter-attacking forces, and limiting their reach as they pull back further each time, witness the advance in price of both commodities and specie metals since 2001.

For people holding their speculation assets in physical form like specie bars of precious metals or coins, resources stocks NOT on margin, this is in fact a good time. Just like the civilians that witness these “successful” counter-attacks, they know there are spoil goods to be had from the retreating forces and forage accordingly. Me, I am gonna go visit my “WE BUY GOLD” Jeweler in the next burg over and see what he'd like to lighten up on...........always nice to have some cash around !!!