A naked short is when one guy sells a contract to deliver a product he does not own next Tuesday. The only way this works is through big money fraud. Both buyer an seller realize this is just a pretend game. The product will never exist. 
Nothing is real. The contract allows for settlement in fiat currency. The natural law of supply and demand has been broken. This is called a derivative.
So what? This is just two guys making a bet on the future value of a product. Who gets hurt?
When this pretend game sets the price for a real product, the producer of the real product gets hurt. If the product is corn, and a rice producer drives the corn price down to manipulate the price, the corn farmer loses. The price has been set artificially. Nothing is real!
In theory, this game stops when the guys playing it stop because of losses. However, this is only theory. Very big players oversee this derivatives game. Nothing is real!
The solution is the honesty of the open ledger blockchain. The big money players in the derivatives game are not likely to become honest and stop their fraud.
Today Silver took a massive drop in price. Some guy sold some paper silver for delivery sometime in the future.
How is it possible to win this game? The only way to win is to refuse to play. Hold real assets. Hold honest assets based on blockchain technology.
Hope for the future where strategies like a naked short are recognized as destructive lies. I am in favor of public executions for those who participate in these games! OFF WITH THEIR HEADS!
Here is today’s beauty.
The one weak item in what you are talking about is the Fiat Dollar. The purchasing power of which has declined by over 95% since the creation of the Fed. The continued creation of more debt in dollar will make it worthless at some time and at that time the trade you talk about will no longer work. We just need to wait our time will come. Have a good day.
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This was a nice educational piece for me. I needed a refresher in the basics of the overall concepts.
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@doctorjohn
The fraud is in the "regulating government agency." The way that futures contracts are supposed to work is this way.
I sell someone a contract. The exchange such as Comex is supposed to have the product for delivery. That is the way it was setup to work for may years. The purchaser then received the goods at a later date.
But, the crooks. Oh yes, the crooks.
And yes, that includes the regulators. If the rules and regulations were followed. It would work just fine.
But, that is not the case today. But I suspect it will end badly for them one day. Those on the short side will have to deliver paper at least.
When the final opportunity arrives. A huge and massive rise up will be locked limit up for many days.
That is what I think anyway.
Francis
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Ya i agree with you sir. I'm learning a lot about your writing. Take care sir
@doctorjohn
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Yes , I agree "The solution is the honesty of the open ledger blockchain." great writing my friend
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Thanks very much!
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Thank you for that explanation. I never really did understand it, probably because it was, basically not real goods. This is why I never really understood what happened in Trading Places. I still don't... completely. Have a great weekend.
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Yeah, tricky stuff that. Like gas... it's not a product, it's a commodity; the price we pay at the pump has little to do with the actual cost of extraction/production and everything to do with people trading in the commodities markets.
I thought both gold AND silver took a dive on the new Fed Chairman?
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did you see the paper gold dump today in contracts.... $3.8 Billion....they have no fear
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They have no fear... because they have never felt pain caused by their actions.
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img credz: pixabay.com
Nice, you got a 6.0% @minnowbooster upgoat, thanks to @doctorjohn
Want a boost? Minnowbooster's got your back!
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